a. Calculate the payback period for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. Calculate the NPV for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. Which project, if any, should the company accept?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The
company has historically used a three-year cutoff for projects. The required return is 14
percent.
Year
Project F
Project G
$138,000
58,500
51,500
61,500
56,500
51,500
$208,000
38,500
53,500
91,500
121,500
136,500
1
4
a. Calculate the payback period for both projects. (Do not round intermediate
calculations and round your answers to 2 decimal places, e.g., 32.16.)
b. Calculate the NPV for both projects. (Do not round intermediate calculations and
round your answers to 2 decimal places, e.g., 32.16.)
c. Which project, if any, should the company accept?
а.
Project F
years
Project G
years
b. Project F
Project G
с.
Transcribed Image Text:Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has historically used a three-year cutoff for projects. The required return is 14 percent. Year Project F Project G $138,000 58,500 51,500 61,500 56,500 51,500 $208,000 38,500 53,500 91,500 121,500 136,500 1 4 a. Calculate the payback period for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. Calculate the NPV for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. Which project, if any, should the company accept? а. Project F years Project G years b. Project F Project G с.
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