QUESTION
Please help me figure out the answers for the missing portions. I have asked for help 3 other times and someone keeps putting the same figures and they are incorrect.A firm with a 13% WACC is evaluating two projects for this years capital budget. After-tax cash flows, including depreciation, are a
Project A NPV 0 1 2 3 4 5 Cash flows -3000 1000 1000 1000 1000 1000 Discounting factor 0.884956 0.783147 0.69305 0.613319 0.54276 Present value 884.9558 783.1467 693.0502 613.3187 542.7599 NPV 517.2312615 Project B NPV 0 1 2 3 4 5 Cash flows -9800 2800 2800 2800 2800 2800 Discounting factor 0.884956 0.783147 0.69305 0.613319 0.54276
Present value 2477.876 2192.811 1940.54 1717.292 1519.728 NPV 48.24753232 Project A — Payback period = 3yrs 1000/3000 = 3yrs 3 months answer Project B — Payback period = 3yrs 1400/2800 = 3yrs 6 months answer Happy to help
ANSWER:
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