Question

1) The following are the cash flows of two projects: Year Project A Project B0 (310)

(310)

1 140 210

2 140 210

3 140 210

4 140

a. If the opportunity cost of capital is 10%, calculate the NPV for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Division a

Division b

2)

The following are the cash flows of two projects:

Year Project A Project B

0 (270) (270)

1 150 170

2 150 170

3 150 170

4 150

a. Calculate the NPV for both projects if the discount rate is 12%. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Project A

Project b

4)

The following are the cash flows of two projects:

Year Project A Project B

0 – 220 -220

1 100 120

2 100 120

3 100 120

4 100

What is the payback period of each project in years? (Round your answers to 1 decimal place.)

Project A

Project B

5)

A project that costs $4,150 to install will provide annual cash flows of $1,400 for each of the next 6 years.

a. What is NPV if the discount rate is 15%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. How high can the discount rate be before you would reject the project? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

 

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