Capital Budgeting Methods
Project S has a cost of $10,000 and is expected to producebenefits (cash flows) of $3,000 per year for 5 years. Project Lcosts $25,000 and is expected to produce cash flows of $7,300 peryear for 5 years.
Calculate the two projects' NPVs, assuming a cost of capital of12%. Round your answers to the nearest cent.
| Project S | $Â Â Â Â |
| Project L | $Â Â Â Â |
Which project would be selected, assuming they are mutuallyexclusive?
-Select-Project SProject LItem 3
- Calculate the two projects' IRRs. Round your answers to twodecimal places.
Which project would be selected, assuming they are mutuallyexclusive?
-Select-Project SProject LItem 6
Calculate the two projects' MIRRs, assuming a cost of capital of12%. Round your answers to two decimal places.
Which project would be selected, assuming they are mutuallyexclusive?
-Select-Project SProject LItem 9
- Calculate the two projects' PIs, assuming a cost of capital of12%. Round your answers to two decimal places.
| Project S | Â Â Â Â |
| Project L | Â Â Â Â |
Which project would be selected, assuming they are mutuallyexclusive?
-Select-Project SProject LItem 12
Which project should actually be selected?
-Select-Project SProject LItem 13
