You are considering the following two projects and can take only one. Your cost of capital is 10.7%. The cash flows for the two projects are as follows ($ million) a. What is the IRR of each project? b. What is the NPV of each project at your cost of capital? c. At what cost of capital are you indifferent between the two projects? d. What should you do? a. What is the IRR of each project? The IRR for project A is %. (Round to one decimal place.) Data table D (Click on the following icon in order to copy its contents into a spreadsheet) Project A Year 0 -$100 B -$100 Year 1 $22 $49 Year 2 $31 $39 Print Done Year 3 Year 4 $39 $49 $31 $21 -

You are considering the following two projects and can take only one. Your cost of capital is 10.7%. The cash flows for the two projects are as follows ($ million) a. What is the IRR of each project? b. What is the NPV of each project at your cost of capital? c. At what cost of capital are you indifferent between the two projects? d. What should you do? a. What is the IRR of each project? The IRR for project A is %. (Round to one decimal place.) Data table D (Click on the following icon in order to copy its contents into a spreadsheet) Project A Year 0 -$100 B -$100 Year 1 $22 $49 Year 2 $31 $39 Print Done Year 3 Year 4 $39 $49 $31 $21 -

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You are considering the following two projects and can take only one. Your cost of capital is 10.6%. The cash flows for the two projects are as follows ($ million): a. What is the NPV of each project at your cost of capital? b. What is the IRR of each project? c. At what cost of capital are you indifferent between the two projects? d. What should you do? a. What is the NPV of each project at your cost of capital? The NPV for project A is $ Data table million. (Round to two decimal places.) (Click on the following icon in order to copy its contents into a spreadsheet.) Year 1 Project A $22 B $48 Year 0 - $100 - $100 Year 2 $28 $42 Year 3 $42 $28 Year 4 $48 $20 - X
You are considering the following two projects and can take only one. Your cost of capital is 10.6%. The cash flows for the two projects a as follows ($ million): a. What is the IRR of each project? b. What is the NPV of each project at your cost of capital? c. At what cost of capital are you indifferent between the two projects? d. What should you do? Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Project Year 0 Year 1 Year 2 A - $100 $24 $30 B - $100 $48 $41 Year 3 $41 $30 Year 4 $48 $18 — X
You are considering the following two projects and can take only one. Your cost of capital is 11.2%. The cash flows for the two projects are as follows ($ million): Project Year 0 Year 1 Year 2 Year 3 Year 4 A -100 26 28 42 48 B-100 48 42 28 19 a. What is the IRR of each project? b. What is the NPV of each project at your cost of capital? c. At what cost of capital are you indifferent between the two projects? d. What should you do?
2. You are considering the following two projects and can take only one. Your cost of capital is 10.7%. The cash flows for the two projects are as follows ($ million): a. What is the IRR of each project? **round to one decimal place** b. What is the NPV of each project at your cost of capital? **round to two decimal places** c. At what cost of capital are you indifferent between the two projects **round to one decimal place** and what should you do? (select one multiple choice answer)
You are choosing between two projects. The cash flows for the projects are given in the attached table ($miilion) . a. What are the IRRs of the two projects? (A &B) b. If your discount rate is 4.9%,what are theNPVs of the two projects? (A & B) c. Why do IRR and NPV rank the two projects differently?
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): a. What are the IRRs of the two projects? b. If your discount rate is 4.6%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently?
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): - a. What are the IRRs of the two projects? b. If your discount rate is 5.1%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently? a. What are the IRRs of the two projects? The IRR for project A is%. (Round to one decimal place.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Project Year 0 Year 1 Year 2 A - $49 $23 $19 B - $101 $19 $40 Print Done Year 3 $18 $49 Year 4 $14 $62 X
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): a. What are the IRRs of the two projects? b. If your discount rate is 4.6%, what are the NPVS of the two projects? c. Why do IRR and NPV rank the two projects differently? a. What are the IRRS of the two projects? The IRR for project A is%. (Round to one decimal place.) Data table CHE (Click on the following icon in order to copy its contents into a spreadsheet.) Project Year 0 Year 1 Year 2 A -$48 $25 $21 B - $98 $20 $39 Print Done Year 3 $19 $52 Year 4 $14 $62 -
You are considering the following two projects and can only take one. Your cost of capital is 11.3%. The cash flows for the two projects are as follows ($ million): Year 2 Year 3 Year 4 Year 0 - $100 Year 1 $23 $29 $39 $51 - $100 $51 $39 $29 $21 Project A B a. What is the IRR of each project? b. What is the NPV of each project at your cost of capital? c. At what cost of capital are you indifferent between the two projects? d. What should you do?
You are choosing between two projects. The cash flows for the projects are given in the following table ( $ million ) : What are the IRRs of the two projects? If your discount rate is 5.4 % , what are the NPVs of the two projects? Why do IRR and NPV rank the two projects differently?
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): a. What are the IRRs of the two projects? b. If your discount rate is 4.7%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently? Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 0 Project A Year 1 - -$51 $27 B - $101 $22 Year 2 $21 $42 Year 3 $20 Year 4 $13 $51 $59 - ☑
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): Project Year 0 Year 1 Year 2 Year 3 Year 4 A −$51 $25 $19 $19 $17 B −$98 $19 $40 $51 $60 a. What are the IRRs of the two projects? b. If your discount rate is 4.8%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently?

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