The following are the cash flows of 2 projects Year 0, Project A $340, Project B $340 Year 1, Project A $170, Project B $240 Year 2, Project A $170, Project B $240 Year 3, Project A $170, Project B $240 Year 4, Project A $170, Project B  Calculate the NPV for both projects if the discount rate is 10% Project A - NPV? Project B - NPV? Suppose that you have can choose only one of these projects. Which would you choose? Project A, B, or niether?

Refer to two projects with the following cash flows: Year Project A Project B 0 -$110 -$110 1 45 55 2 45 55 3 45 55 4 45 If the opportunity cost of capital is 11%, what is the profitability index for each project?

Calculate the payback period, the discounted payback period and the NPV for the following project using a rate of 5%.                                                                                                          Time            Cash Flow                 0  - $53,000    1                                        $  21,000 2                                        $  21,000 3                                        $  21,000   NPV =   Payback =                                                               Discounted Payback =

Calculate the NPVs of both Project X and Project Y.  Show the NPVs for each project.  If the Projects are Independent which would you approve?  If the Projects are Mutually Exclusive which would you approve?

Calculate the payback period, the discounted payback period and the NPV for the following project using a rate of 5%.                                                                                                                     Time                    Cash Flow                        0  - $63,000        $ 21,000 $ 21,000 $ 21,000 $ 21,000   Payback =                                                                   Discounted Payback =

Consider the following two projects: Cash flows Project A Project B C0�0 −$ 240 −$ 240 C1�1 100 123 C2�2 100 123 C3�3 100 123 C4�4 100   a. If the opportunity cost of capital is 8%, which of these two projects would you accept (A, B, or both)? b. Suppose that you can choose only one of these two projects. Which would you choose? The discount rate is still 8%. c. Which one would you choose if the cost of capital is 16%? d. What is the payback period of each project? e. Is the project with the shortest payback period also the one with the highest NPV? f. What are the internal rates of return on the two projects? g. Does the IRR rule in this case give the same answer as NPV? h. If the opportunity cost of capital is 8%, what is the profitability index for each project? i. Is the project with the highest profitability index also the one with the highest NPV? j. Which measure should you use to choose between the projects?

Case 1: Assume you are evaluating two mutually exclusive projects,the cash flows of which appear below, and that your company uses a cost of capital of 8 percent to evaluate projects such as these. Time Project A Cash Flow Project B Cash Flow 0 -$650 -$700 1 100 300 2 250 -200 3 250 550 4 200 200 5 100 80 a. Calculate the payback of Project A. b. Calculate the discounted payback of Project A. c. Calculate the IRR of Project A. d. Using the NPV method and assuming a cost of capital of 8 percent, which of these projects should be accepted?

Filter Corporation has a project available with the following cash flows: Year Cash Flow 0 −$ 14,500 1 7,400 2 8,700 3 2,500 4 2,100 What is the project's IRR? Multiple Choice 21.63% 22.49% 23.07% 20.76% 24.22%

A project has the following cash flows: Cash Year Flow 16,300 1 7,000 8,300 6,800 2 3 a. What is the NPV at a discount rate of zero percent? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the NPV at a discount rate of 12 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the NPV at a discount rate of 19 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What is the NPV at a discount rate of 28 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) а. NPV b. NPV C. NPV NPV

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