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astra-53 [7]
3 years ago
10

Projects A and B are mutually exclusive and have an initial cost of $82,000 each. Project A provides cash inflows of $34,000 a y

ear for three years while Project B produces a cash inflow of $115,000 in Year 3. Which project(s) should be accepted if the discount rate is 11.7 percent? What if the discount rate is 13.5 percent?
Business
1 answer:
MrRissso [65]3 years ago
7 0

Answer:

If discount rate is 11.7% Project B should be accepted.

If discount rate is 13.5% both projects should be rejected

Explanation:

If the Net present value of Project A is higher than that of project B, we will accept project A and vice versa.

<u>Under 11.7% Discount Rate</u>

Net Present Value-Project A = -82000 + 34000 / 1.117  +  34000 / 1.117²  +   34000 / 1.117³  = $85.099

Net Present Value-Project B = -82000 + 115000 / 1.117³ = $516.029

Project B should be accepted as it has a higher NPV.

<u />

<u>Under 13.5% Discount Rate</u>

Net present Value-Project A = -82000 + 34000 / 1.135 + 34000 / 1.135² + 34000 / 1.135³   = - $2397.49

Net Present Value-Project B = -82000 + 115000 / 1.135³  = - $3347.91

Both projects should be rejected as both have negative NPVs

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Answer:

NetonBe

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a) Data and Calculations:

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Therefore, the standard deviation in demand for each of these three generic sweaters will be = 600 (6,000 * 10%)

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2 years ago
In most organizations, who is primarily responsible for appraising an employee's performance
ivanzaharov [21]
It is and should be the managers job to do that
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3 years ago
Jones Company has the following data to make 10,000 seats for its bicycles: Variable Product Costs 80,000 Fixed Product Costs 10
klasskru [66]

Answer:

The company should make the bicycle seats.

Explanation:

Given:

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4 0
3 years ago
You manage a risky portfolio with an expected rate of return of 22% and a standard deviation of 35%. The T-bill rate is 6%. Your
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Answer

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Explanation  

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What is a minimum balance? A. The process of balancing your checkbook register against your bank statement B. The largest number
Leno4ka [110]

Answer:

What is a minimum balance?

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3 years ago
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