A company is considering two projects.   Project I Project II Initial investment $120,000 $120,000 Cash inflow Year 1 $40,000 $20,000 Cash inflow Year 2 $40,000 $20,000 Cash inflow Year 3 $40,000 $32,000 Cash inflow Year 4 $40,000 $48,000 Cash inflow Year 5 $40,000 $50,000 What is the payback period for Project I? a.5 years b.3.5 years c.2.5 years d.1 year e.3 years

Given the data in the following table, what is the IRR of Project B?

7. The NPV and payback period What information does the payback period provide? Suppose Extensive Enterprises's CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost; however, she does know that the project's regular payback period is 2.5 years. Year Year 1 Year 2 Year 3 Year 4 Cash Flow $275,000 $475,000 $500,000 $400,000 If the project's weighted average cost of capital (WACC) is 10%, what is its NPV? $291,425 O $276,854 O $233,140 O $335,139 Which of the following statements indicate a disadvantage of using the discounted payback period for capital budgeting decisions? Check all that apply. The discounted payback period is calculated using net income instead of cash flows. The discounted payback period does not take the time value of money into account. The discounted payback period does not take the project's entire life into account.

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our company is considering two projects, Project A and Project B. The expected cash flows from the projects are as follows: • Project A: Initial Investment = $1,000,000; Year 1 = $300,000; Year 2 = $400,000; Year 3 = $500,000 • Project B: Initial Investment = $1,500,000; Year 1 = $600,000; Year 2 = $700,000; Year 3 = $800,000 Using a discount rate of “US 10-year government bond rate today + 2%”, calculate the NPV and IRR for both projects and advise which project the company should choose. Justify your decision....

An investment project provides cash inflows of $950 per year for eight years. a. What is the project payback period if the initial cost is $3,450? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. What is the project payback period if the initial cost is $4,500? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. What is the project payback period if the initial cost is $8,600? (Enter 0 if the project never pays back. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

The NPV and payback period What information does the payback period provide? Suppose ABC Telecom Inc.’s CFO is evaluating a project with the following cash inflows. She does not know the project’s initial cost; however, she does know that the project’s regular payback period is 2.5 years. Year Cash Flow Year 1 $350,000 Year 2 $500,000 Year 3 $500,000 Year 4 $400,000   If the project’s weighted average cost of capital (WACC) is 10%, what is its NPV? $280,268   $224,214   $252,241   $322,308     Which of the following statements indicate a disadvantage of using the discounted payback period for capital budgeting decisions? Check all that apply. The discounted payback period does not take the project’s entire life into account.   The discounted payback period is calculated using net income instead of cash flows.   The discounted payback period does not take the time value of money into account.

What is the NPV, payback period, and internal rate of return for Project A. With the initial cost of 1250000.000

The Canary Company is looking to invest in a new project.  They have narrowed it down to two potential projects – A and B.  The data on investment and cash flows for each project is outlined below.  Project    Initial Investment    Year One    Year Two    Year Three    Year FourProject A    $450,000    $200,000    $225,000    $275,000    $200,000Project B    $500,000    $150,000    $200,000    $300,000    $250,000 The appropriate discount rate for each project is 16%.  With this information, determine the following information: •    NPV of cash flows for each project•    Profitability index for each project Based on your calculations, which project do you select and why?

Consider a project with the following information: Year 1 2 3 4 5 6 Initial outlay= $950,000 Compute the NPV if the company's discount rate is 10%. 1) $268,244 2) $201,650 3) $213,050 $129 After-tax cash flows $300,000 $400,000 $400,000 $200,000 $150,000 $150,000