A company has the following 2 projects: Projects C0 C1 C2 C3 A -36 20 20...

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Finance

A company has the following 2 projects: Projects C0 C1 C2 C3 A-36 20 20 20 B -50 25 25 25 Assume that the discount rate is 10%.How much is the difference between the NPV values of these 2projects (i.e., NPV of Project A minus NPV of Project B)? A) 0.57B) 1.57 C) 3.67 D) 4.67 E) 13.17
A company uses Internal Rate of Return(IRR) criteria to analyze the following two mutually exclusiveprojects:Â Â Â Â Â
Project
C0
C1
C2
C3
NorthEast
-1100
1000
350
50
SouthWest
-1100
0
300
1500
Â Â Â Assume that thiscompanyâ€™s opportunity cost of capital (i.e., Hurdle rate for IRRanalysis) is 10%. Then,
which project should be accepted based on IRR analysis?
how much is the IRR of this accepted project?Â Â
Â Â Â Â (i)Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (ii)
Â Â Â Â Â Â Â Â Â A)Â Â Â Â Â Â Â Â Â Â Â ProjectNorthEastÂ Â Â Â Â Â Â Â Â Â 20%
Â Â Â Â Â Â Â Â Â Â Â Â Â B)ProjectSouthWestÂ Â Â Â Â Â Â Â Â 19%
Â Â Â Â Â Â Â Â Â C)Â Â Â Â Â Â Â Â Â Â Â ProjectSouthWestÂ Â Â Â Â Â Â Â Â 30%
Â Â Â Â Â Â Â Â Â Â Â Â Â D)ProjectSouthWestÂ Â Â Â Â Â Â Â Â 26%Â Â Â Â Â Â Â
Â Â Â Â E)Â Â Â Â ProjectNorthEastÂ Â Â Â Â Â Â Â Â Â 24%

Answer & Explanation Solved by verified expert

4.2 Ratings (912 Votes)

Project ANet present value is calculated using a financial calculator byinputting the below Press the CF button CF0 36 It is entered with a negative signsince it is a cash outflow Cash flow for each year should be entered Press Enter and down arrow after inputting eachcash flow After entering the last cash flow cash flowpress the NPV button and enter the discount rate of 10 Press enter after that Press the down arrow andCPT buttons to See Answer

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Project	C0	C1	C2	C3
NorthEast	-1100	1000	350	50
SouthWest	-1100	0	300	1500