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Unformatted text preview: NCF 11-19 = $28,300 NCF 20 = $351,896 NPV = $18,899.17 (using a financial calculator) Yes, because NPV > 0 b. NPV = $-2,240.65 (using a financial calculator) No, because NPV < 0 80 Chapter 11 – Capital Budgeting Decision Criteria and Risk Analysis . 13. a. NPV A = $4,331 NPV B = $8,662 b. IRR A = 19.86% IRR B = 19.86% c. PI A = 1.14 PI B = 1.14 d. PB A = 3 years PB B = 3 years e. Wang should accept project B because its NPV is positive and higher than the NPV of project A. A will add more to shareholder wealth than B. 15. a. NPV = -$250,762 b. The project is unacceptable since NPV < 0. . c. IRR = 6.64% (using a financial calculator) 22. a. NPV = $1,803 (by financial calculator) b. IRR = 12.77% (by financial calculator) c. PI = 1.020 (by calculator) d. The project should be accepted since its NPV is positive. 81...
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This note was uploaded on 08/22/2009 for the course FIN 3310 taught by Professor Potts during the Spring '08 term at Baylor.
- Spring '08