Given the following two mutually exclusive projects, always choose Project A (the project with a higher IRR). Project NPV IRR A $100 10.5% B $150 9.5% Group of answer choices True False
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Given the following two mutually exclusive projects, always choose Project A (the project with a higher
| Project | NPV | IRR |
| A | $100 | 10.5% |
| B | $150 | 9.5% |
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- Answer this question as it is pertaining to two MUTUALLY EXCLUSIVE projects on the following figure. If r=6%, which project would you choose by using the net present value (NPV) as the criterion? Group of answer choices Project A Project B Neither EitherAnswer this question as it is pertaining to two MUTUALLY EXCLUSIVE projects on the following figure. Given r=6%, which project would you choose if you decide to use the internal rate of return (IRR) as the criterion? Group of answer choices Project A Project B Neither EitherUse attachment to answer question q3- This question relates to the diagram, which shows the NPV profile for Projects X and Y. What is the Internal Rate of Return of Project X? Select one: a. 13% b. 9% c. 4% d. 10%
- Whispering Winds Company is considering a long-term investment project called ZIP. ZIP will require an investment of $130,000. It will have a useful life of four years and no salvage value. Annual cash inflows would increase by $81,000, and annual cash outflows would increase by $40,500. In addition, the company's required rate of return is 10% Click here to view the factor table (a) Calculate the net present value on this project. (If the answer is negative, use either a negative sign preceding the number eg-5,275 or parentheses es. (5,275), For calculation purposes, use 5 decimal places as displayed in the factor table provided, eg. 1.25124 and final answer to O decimal places, eg. 5,275) Net present value $ Identify whether the project should be accepted or rejected. The project should be (b) Q Search 458 PMPRINTED NAME _____________________________________________ Project X Project Y PB (payback) DPB (Discounted Payback) NPV $ PI IRR% MIRR% EAA (NUS) $ CROSSOVER RATE % NPV $ (using crossover rate) If the projects are INDEPENDENT, which would you choose? WHY? _____________________________________________________________ If the projects are MUTUALLY EXCLUSIVE, which would you choose? WHY? _____________________________________________________________ When you would be INDIFFERENT between the projects? WHY? _____________________________________________________________ SIGNATURE _____________________________________________________A2. (PaybackandNPV)Threeprojectshavethecashflowsgivenhere.Thecostofcapitalis10%. a. Calculate the paybacks for all three projects. Rank the projects from best to worst based on their paybacks. Calculate the NPVs for all three projects. Rank the projects from best to worst based on their NPVs c. Why are these two sets of rankings different? YEAR 0 1 2 3 4 5Project 1 −10 4 3 2 1 5 Project 2 −10 1 2 3 4 5 Project 3 −10 4 3 2 1 10
- Determine the feasibility of below presented project using FW Method. Use MARR = 10% Note: Round off your answer to the NEAREST WHOLE NUMBER and show complete solution Answer the following: FW of Alt. A is $Blank 1 FW of Alt. B is $Blank 2 FW of Alt. C is $Blank 3 FW of Alt. D is $Blank 4 Select Alternative (Write only the letter if A,B,C or D) Blank 5Hello, Please assist w NPV and payback method calculations for following data: Project B completion time probability should be 0.2 for 24mo instead of 0.10 ThanksStart with the partial model in the file Ch10 P23 Build a Model.xlsx on the textbooks Web site. Gardial Fisheries is considering two mutually exclusive investments. The projects expected net cash flows are as follows: a. If each projects cost of capital is 12%, which project should be selected? If the cost of capital is 18%, what project is the proper choice? b. Construct NPV profiles for Projects A and B. c. What is each projects IRR? d. What is the crossover rate, and what is its significance? e. What is each projects MIRR at a cost of capital of 12%? At r = 18%? (Hint: Consider Period 7 as the end of Project Bs life.) f. What is the regular payback period for these two projects? g. At a cost of capital of 12%, what is the discounted payback period for these two projects? h. What is the profitability index for each project if the cost of capital is 12%?
- Consider two project alternatives, project I and project II, with their payoffs and their associated probabilities outlined in the following table: Project I Project II Payoff 10 15 20 Probability 0.1 0.8 0.1 Payoff 1. Compute RRI for each project; 2. Would you select project I or project II? Why. 5 10 14 Probability 0.2 0.3 0.5b) Using data provided below, compute appropriate values and fill the table below to help identify the least risky and most risky project among alternatives A, B and C using appropriate criteria. Project EV D D2 Var St. dev Coef.0f Var TT 12 0.2 A 18 0.7 28 0.1 10 0.3 В 22 0.6 32 0.1 11 0.1 C 21 0.8 31 0.1 Where n denotes the profit, P is the probability, EV stand for Expected value, D is the Deviation, D$ denote the deviation square, St. dev is the standard deviation and finally Coef.of Var is the coefficient of variation.5a. EQ: Internal rate of return = the rate that equates inflows with outflows 5b. Rule: Accept the project if the IRR > the required return. 5c. EX: Reevaluate the project in "1c" using the IRR method and a 10% required return: IRR 9.70% REJECT 5d. Problem: Reevaluate the project in "3c" using the IRR method and an 11% required return. 6a. EQ: Modified IRR = [(FV of inflows) / Cost]/n - 1 6b. Rule: Accept the project if the MIRR > the required return. 6c. EX: Reevaluate the project in "1c" using the MIRR method, a 3% re-interest rate and a 10% required MIRR= [($10,000 x 3.0909) / $25,000] 1/3-1 = 0.0733 or 7.33% REJECT rate. 6d. Problem: Evaluate a project costing $100,000 and returning $25,000 annually for five years using the MIRR method, a 4% re-interest rate and a 9% required return. 7a. EQ: Profitability index = PV of the inflows / Cost 7b. Rule: Accept the project if the PI > 1. 7c. EX: Evaluate a project costing $25,000 and returning $10,000 annually for years 1-3 using the PI…
