lease answer questions 1-4 based on the following information: A and B are mutually exclusive projects. The required rate of return is 14%. • The cutoff period is 2.5 years. Year Project A Project B 0 $1,000 $1,000 200 1 550 250 Z 350 300 3 250 600 4 200 3. 2 If the company applies the NPV decision, which project should be recommended? a Project A because it has NPV of $78.81 b. Project A because it has NPV of $38.93 c Project B because it has NPV of $40.97 d. Project B because it has NPV of $100.40 If the company applies the payback period decision, which project should be recommended? a. Project A because it has payback of 2.3 years. b. Project A because it has payback of 2.4 years. c. Project B because it has payback of 2.4 years. d. Project B because it has payback of 3.2 years. e. Neither of two projects is recommended. If the company applies the MIRR decision, which project should be recommended? a. Project A because it has MIRR of 15.09%. b. Project A because it has MIRR of 12.66%. Project 8 because it has MIRR of 15-15% d. Project & because it has MIRR of 12.66% company applies P (Profitability index) decision, which project should b mended Chos Pt of 1.078 has Pf of 1099 041

lease answer questions 1-4 based on the following information: A and B are mutually exclusive projects. The required rate of return is 14%. • The cutoff period is 2.5 years. Year Project A Project B 0 $1,000 $1,000 200 1 550 250 Z 350 300 3 250 600 4 200 3. 2 If the company applies the NPV decision, which project should be recommended? a Project A because it has NPV of $78.81 b. Project A because it has NPV of $38.93 c Project B because it has NPV of $40.97 d. Project B because it has NPV of $100.40 If the company applies the payback period decision, which project should be recommended? a. Project A because it has payback of 2.3 years. b. Project A because it has payback of 2.4 years. c. Project B because it has payback of 2.4 years. d. Project B because it has payback of 3.2 years. e. Neither of two projects is recommended. If the company applies the MIRR decision, which project should be recommended? a. Project A because it has MIRR of 15.09%. b. Project A because it has MIRR of 12.66%. Project 8 because it has MIRR of 15-15% d. Project & because it has MIRR of 12.66% company applies P (Profitability index) decision, which project should b mended Chos Pt of 1.078 has Pf of 1099 041

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 11MC: In an unrelated analysis, you have the opportunity to choose between the following two mutually...

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