Note: Question 12, 13, 14 and 15 are based on the same two projects A and B. Your firm has estimated the following cash flows for two mutually exclusive capital investment projects. Firm uses 4.9 years as the cutoff for the discounted payback period. The firm's required rate of return is 11%. What is the Pl of project B? Project A Cash Flow Year Project B Cash Fla -$80,000 -$180,000 1 $23,000 $53,000 2 $23,000 $53,000 3 $23,000 $47,000 4 $20,000 $47,000 5 $20,000 $40,000 6 $20,000 $27,000 1.21 O 2.21 1.36 1.08 O 1.15
Note: Question 12, 13, 14 and 15 are based on the same two projects A and B. Your firm has estimated the following cash flows for two mutually exclusive capital investment projects. Firm uses 4.9 years as the cutoff for the discounted payback period. The firm's required rate of return is 11%. What is the Pl of project B? Project A Cash Flow Year Project B Cash Fla -$80,000 -$180,000 1 $23,000 $53,000 2 $23,000 $53,000 3 $23,000 $47,000 4 $20,000 $47,000 5 $20,000 $40,000 6 $20,000 $27,000 1.21 O 2.21 1.36 1.08 O 1.15
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 21P
Related questions
Question
![Note: Question 12, 13, 14 and 15 are based on the same
two projects A and B.
Your firm has estimated the following cash flows for two
mutually exclusive capital investment projects. Firm uses
4.9 years as the cutoff for the discounted payback period.
The firm's required rate of return is 11%.
What is the Pl of project B?
Project A Cash Flow
Year
Project B Cash Flow
-$80,000
-$180,000
1
$23,000
$53,000
$23,000
$53,000
3
$23,000
$47,000
4
$20,000
$47,000
5
$20,000
$40,000
6
$20,000
$27,000
1.21
2.21
1.36
1.08
1.15](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F507037d1-a955-42c8-9504-1a0da1769f4c%2F9edef92a-f009-4dd3-afaf-8ddee52a7c2d%2Fvjs9drq_processed.png&w=3840&q=75)
Transcribed Image Text:Note: Question 12, 13, 14 and 15 are based on the same
two projects A and B.
Your firm has estimated the following cash flows for two
mutually exclusive capital investment projects. Firm uses
4.9 years as the cutoff for the discounted payback period.
The firm's required rate of return is 11%.
What is the Pl of project B?
Project A Cash Flow
Year
Project B Cash Flow
-$80,000
-$180,000
1
$23,000
$53,000
$23,000
$53,000
3
$23,000
$47,000
4
$20,000
$47,000
5
$20,000
$40,000
6
$20,000
$27,000
1.21
2.21
1.36
1.08
1.15
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