The followings are cash flows of two mutually exclusive projects: Projects I and II. Project I: Year 0: -200,000, Year 1: 50,000, Year 2: 100,000, Year 3: 150,000, Year 4: 40,000 Project II: Year 0: -100,000, Year 1: 40,000, Year 2: 90,000, Year 3: 30,000, Year 4: 60,000 The cost of capital for the company is the same as what you have estimated in the previous question (use a round number, round to the closet integer). Which project should the company select based on the following criteria? Cost of Capital = 10.9% a. Payback period (The critical payback period is 2.5 years) Payback(Project 1)= Payback(Project 2)= Which one should you choose? (Better) b. Net present value NPV(Project 1)= NPV(Project 2)= Which one should you choose? (Better) c. Internal Rate of Return IRR(Project 1)= IRR(Project 2)= Which one should you choose? (Better) d. Profitability Index PI(Project 1)= PI(Project 2)= Which one should you choose? (Better)
The followings are cash flows of two mutually exclusive projects: Projects I and II.
Project I: Year 0: -200,000, Year 1: 50,000, Year 2: 100,000, Year 3: 150,000, Year 4: 40,000
Project II: Year 0: -100,000, Year 1: 40,000, Year 2: 90,000, Year 3: 30,000, Year 4: 60,000
The cost of capital for the company is the same as what you have estimated in the previous question (use a round number, round to the closet integer). Which project should the company select based on the following criteria? Cost of Capital = 10.9%
a. Payback period (The critical payback period is 2.5 years)
Payback(Project 1)=
Payback(Project 2)=
Which one should you choose? (Better)
b.
NPV(Project 1)=
NPV(Project 2)=
Which one should you choose? (Better)
c.
IRR(Project 1)=
IRR(Project 2)=
Which one should you choose? (Better)
d. Profitability Index
PI(Project 1)=
PI(Project 2)=
Which one should you choose? (Better)
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