(Click on the following icon in order to copy its contents into a spreadsheet.) Year 1 Year 2 Year 3 Year 0 <<-$50 $26 $20 $22 -$101 $22 $39 $49 Project A B Year 4 $16 $62 You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): a. What are the IRRs of the two projects? b. If your discount rate is 5.2%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently?

(Click on the following icon in order to copy its contents into a spreadsheet.) Year 1 Year 2 Year 3 Year 0 <<-$50 $26 $20 $22 -$101 $22 $39 $49 Project A B Year 4 $16 $62 You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): a. What are the IRRs of the two projects? b. If your discount rate is 5.2%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently?

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Description: (Click on the following icon in order to copy its contents into a spreadsheet.)Year 1Year 2Year 3Year 0-$50-$101$26$20$22$22$39$49ProjectABYear 4$16$62Youare choosing between two projects. The cash flows for the projectsare given in the following ta

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 16EB: Project Y cost $8,000 and will generate net cash inflows of $1,500 in year one, $2,000 in year two,...

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You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): a. What are the IRRs of the two projects? b. If your discount rate is 4.7%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently? Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 0 Project A Year 1 - -$51 $27 B - $101 $22 Year 2 $21 $42 Year 3 $20 Year 4 $13 $51 $59 - ☑
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): Year 2 Year 0 - $51 - $101 $21 $42 Project A B Year 1 $25 $20 a. What are the IRRs of the two projects? b. If your discount rate is 4.6%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently? %. (Round to one decimal place.) a. What are the IRRs of the two projects? The IRR for project A is The IRR for project B is %. (Round to one decimal place.) b. If your discount rate is 4.6%, what are the NPVs of the two projects? If your discount rate is 4.6%, the NPV for project A is $ C Year 3 $21 $50 Year 4 $15 $59 million. (Round to two decimal places.) million. (Round to two decimal places.) If your discount rate is 4.6%, the NPV for project B is $ c. Why do IRR and NPV rank the two projects differently? (Select from the drop-down menus.) is measuring return on NPV and IRR rank the two projects differently because they are measuring…
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): Project Year 0 Year 1 Year 2 Year 3 Year 4 - $51 - $102 $25 $19 $18 $40 $21 $48 $14 $59 A В a. What are the IRRS of the two projects? b. If your discount rate is 5.3%, what are the NPVS of the two projects? c. Why do IRR and NPV rank the two projects differently? a. What are the IRRS of the two projects? The IRR for project A is %. (Round to one decimal place.) The IRR for project B is %. (Round to one decimal place.) b. If your discount rate is 5.3%, what are the NPVS of the two projects? If your discount rate is 5.3%, the NPV for project A is $ million. (Round to two decimal places.) If your discount rate is 5.3%, the NPV for project B is $ million. (Round to two decimal places.) c. Why do IRR and NPV rank the two projects differently? (Select from the drop-down menus.) NPV and IRR rank the two projects differently because they are measuring different things. is…
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): Project Year 0 Year 1 Year 2 Year 3 Year 4 A −$51 $25 $19 $19 $17 B −$98 $19 $40 $51 $60 a. What are the IRRs of the two projects? b. If your discount rate is 4.8%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently?
A project has the following cash flows set out below. What is the profitability index of this project if the relevant discount rate is 2 percent? Enter your final answer to two decimal places. Year Cash flow 0 -1,745 1 537 2 2,066 3 3,912
You have 3 projects with the following cash flows: (Click on the following icon in order to copy its contents into a spreadsheet.) Year 1 4 Project 1 Project 2 Project 3 - $151 $21 $40 $59 $81 - 827 7,008 - 6,502 21 40 59 80 - 243 a. For which of these projects is the IRR rule reliable? b. Estimate the IRR for each project (to the nearest 1%). c. What is the NPV of each project if the cost of capital is 5%? 20%? 50%? a. For which of these projects is the IRR rule reliable? (Select from the drop-down menus.) The IRR rule is reliable for V. Unless all of the cash flows of the project precede the ones, the IRR rule may give the wrong answer and should not be used. Furthermore, there may be multiple IRRS or the IRR may not exist. b. Estimate the IRR for each project (to the nearest 1%). The IRR for project 1 is %. (Round to the nearest integer.) The IRR for project 2 is %. (Round to the nearest integer.) The IRR for project 3 is %. (Round to the nearest integer.) c. What is the NPV of each…
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): a. What are the IRRs of the two projects? b. If your discount rate is 4.6%, What are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently? **round to one decimal place**
Solve the following problem by applying the method used in the video uploaded in your Pewertaint presentation. You may check Lesson 04 Video 02 Payback pierrad Problem. Assume the following cash flow for 2 projects. Assutming that the cash flows are occurring at the end of the year. Find the payback period for both these projects Year Project 1 Project 2 1000 600 1000 100 400 200 200 100 400 600 600 700
不 Data table You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): a. What are the IRRS of the two projects? b. If your discount rate is 4.6% what are the NPVS of the two projects? c. Why do IRR and NPV rank the two projects differently? a. What are the IRRS of the two projects? The IRR for project A is ☐ %. (Round to one decimal place.) (Click on the following icon in order to copy its contents into a spreadsheet.) Project A Year 0 - $49 Year 1 $24 B - $99 $18 Year 2 $21 $40 Print Done Year 3 Year 4 $19 $14 $50 $61
NPV profile of a project. Given the following cash flow of Project L-2, draw the NPV profile. Hint: Be sure to use a discount rate of zero for one intercept (y-axis) and solve for the IRR for the other intercept (x-axis). (Click on the following icon in order to copy its contents into a spreadsheet.) Year 0 = - $300,000 Year 1= $42,000 Year 2 = $77,000 Year 3 = $111,000 Year 4 = $140,000 What is the NPV of Project L-2 where zero is the discount rate? $ 70000.00 (Round to the nearest dollar.) What is the IRR of Project L-2? % (Round to two decimal places.)
6. You are choosing between two projects. The cash flows for the projects are given in the following Data table ($ million): Project Year 0 Year 1 Year 2 Year 3 Year 4 A −$48 $27 $19 $22 $15 B −$100 $22 $39 $48 $62 The IRR for project A is __________________________%. (Round to one decimal place.) The IRR for project B is____________________________%.(Round to one decimal place.) If your discount rate is 5.4%, the NPV for project A is $_______________million.(Round to two decimal places.) If your discount rate is 5.4%, the NPV for project B is $______________ million.(Round to two decimal places.) NPV and IRR rank the two projects differently because they are measuring different things. ___________________is measuring value creation, while ___________________is measuring return on investment. Because returns do not scale with different levels of investment, the two measures may give different rankings when…
NPV profile of a project. Given the following cash flow of Project L-2, draw the NPV profile. Hint. Be sure to use a discount rate of zero for one intercept (y-axis) and solve for the IRR for the other intercept ( x-axis). (Click on the following icon ◻ in order to copy its contents into a spreadsheet.) Year 0=-$300,000 Year 1=$50,000 Year 2=$79,000 Year 3=$118,000 Year 4=$130,000 What is the NPV of Project L-2 where zero is the discount rate? $ (Round to the nearest dollar.) What is the IRR of Project L-2? % (Round to two decimal places.) Which of the graphs below best fits the NPV profile of the project? Click on the magnifying glass icon to see an enlarged version of each graph. (Select the best response.) B. D.