Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. consider the following projects: cash flows ($

Consider the following projects: Cash Flows ($) Project C0 C1 C2 C3 C4 C5 A ?2,800 2,800 0 0 0 0 B ?5,600 2,800 2,800 5,800 2,800 2,800 C ?7,000 2,800 2,500 0 2,800 2,800 If the opportunity cost of capital is 12%, which project(s) have a...

50.1K

Verified Solution

Question

Finance

Consider the followingprojects:

Cash Flows ($)
ProjectC0C1C2C3C4C5
A?2,8002,8000000
B?5,6002,8002,8005,8002,8002,800
C?7,0002,8002,50002,8002,800

  1. If the opportunitycost of capital is 12%, which project(s) have a positive NPV?

    Positive NPV Projects

  2. Calculate the paybackperiod for each project.

    Project Ayears
    Project B   years
    Project C   years

  3. Which project(s) woulda firm using the payback rule accept if the cutoff period is threeyears?

    Project accepted  

  4. Calculate thediscounted payback period for each project.

    Project A   years
    Project B   years
    Project Cyears

  5. Which project(s) woulda firm using the discounted payback rule accept if the cutoffperiod is three years?

    Project accepted

Answer & Explanation Solved by verified expert
4.2 Ratings (888 Votes)
a Calculation of NPV Project A Year Cashflow PVF12 CashflowPVF 0 2800 1 280000 1 2800 08929 250000 NPV PV of Inflows PV of OUtflows 25002800 300 Project B Year Cashflow PVF12 CashflowPVF 0 5600 1 560000 1 2800 08929 250000 2 2800 07972 223214 3 5800 07118 412833 4 2800 06355 177945 5 2800 05674 158880 NPV PV of Inflows PV of OUtflows 25002232144128331779451588805600 12228715600 662871 Project C Year Cashflow    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Consider the followingprojects:Cash Flows ($)ProjectC0C1C2C3C4C5A?2,8002,8000000B?5,6002,8002,8005,8002,8002,800C?7,0002,8002,50002,8002,800If the opportunitycost of capital is 12%, which project(s) have a positive NPV?Positive NPV ProjectsCalculate the paybackperiod for each project.Project AyearsProject B   yearsProject C   yearsWhich project(s) woulda firm using the payback rule accept if the cutoff period is threeyears?Project accepted  Calculate thediscounted payback period for each project.Project A   yearsProject B   yearsProject CyearsWhich project(s) woulda firm using the discounted payback rule accept if the cutoffperiod is three years?Project accepted

Other questions asked by students

Q

How is the Zappos Insider program providing interested applicants with a realistic job preview? What might...

General Management
Q

There are fourteen songs on your playlist. With random shuffle and no repetition, you listen...

Basic Math
Q

S eBook Hint Print ferences Req A Req B and C My ng Accounts Receivable...

Statistics
Q

Use the volume V by method of cylindrical Shells to find the V generated by...

Calculus
Q

y = xe 2x 0 ? x ? In3On this interval, the maximum value(s) occur...

Calculus
Q

Teal Mountain Express reports the following costs...

Accounting
Q

eBook Question Content Area Weighted Average Cost Method with Perpetual Inventory The beginning inventory at...

Accounting
Q

Saved Data pertaining to a company's joint production for the current period follows: Quantities produced...

Accounting
Q

4.1 Debtors Collection Schedule (4 marks) 4.2 Cash Budget (16 marks) INFORMATION The information provided...

Accounting
Q

You want to be able to withdraw $6500 from an account at the end of...

Accounting
Q

Problem 14-2 Determining expense and balance sheet amounts (journal entries) (LO 14-3, LO 14-4, LO...

Accounting
Q

Ome characteristic of plant assets is that they are: Current assets. Used in operations. Natural...

Accounting