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 13 percent. Year Project F Project G0-$137,000-$ 207,000 1 59,000 39,000 2 51,000 54,000 3 61,000 91,000 4 56,000 121,000 5 51,000 136,000 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?

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 13 percent. Year Project F Project G0-$137,000-$ 207,000 1 59,000 39,000 2 51,000 54,000 3 61,000 91,000 4 56,000 121,000 5 51,000 136,000 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?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 10P: Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year...

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