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  3. solve it 3) a firm has the following mutually ex

solve it 3) A firm has the following mutually exclusive projects: Year 0...

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3) A firm has the following mutually exclusive projects: Year 0 1 Project A Cash Flow (SR) -34000 19000 15500 4300 Project B Cash Flow (SR) -37000 20000 14000 15500 2 3 a) Calculate the payback periods for these projects. b) Which of these projects should be chosen by the firm? c) What is the NPW for each project if MARR is 15% and which of these projects, should be chosen by the firm? d) For both projects, find the interest rate at which the project will convert from acceptable to be unacceptable. 4) A company is considering the purchase of a plant for $150,000. It is expected to produce the following after-tax net cash flows. The cash flows occur evenly throughout each year. Years Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Net Cash -24,000 -24,000 70,000 150,000 80,000 90,000 100,000 Flow ($) a) Compute the payback period for this investment. b) Compute the equivalent worth of this investment after 2 years from the start of the project assuming the company's MARR is 15% by two methods. c) If another company is willing to purchase this plant, what would the company set the price of the plant

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