Question

Your division is considering two investment projectseach requires an upfront expenditure of rs 250000 your estiimate that the cost of capital ia 12% and the invesstment will provide following before depreciation and after cashflow

Answer 1

Answer:

Explanation:

Year Project A        Project B

1                5                     20

2              10                      10

3               15                     8

4             20                      6

What is the regular payback period for each of the projects? Round your answers to two decimal places.

Project A years

Project B years

What is the discounted payback period for each of the projects? Round your answers to two decimal places.

Project A years

Project B years

If the two projects are independent and the cost of capital is 8%, which project or projects should the firm undertake?

Project A

Project B

Both projects

If the two projects are mutually exclusive and the cost of capital is 5%, which project should the firm undertake?

-Project A

Project B

If the two projects are mutually exclusive and the cost of capital is 15%, which project should the firm undertake?

Project A

Project B

What is the crossover rate? Round your answer to two decimal places.

%

If the cost of capital is 8%, what is the modified IRR (MIRR) of each project? Round your answers to two decimal places.

Project A %

Project B %