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Ch_09_HW_A_Solutions

# Ch_09_HW_A_Solutions - 16 = 1,684.81 17 = 2,052.51 18 =...

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Ch 9 HW A Solutions 1 Ch 09 HW A Solutions 1. Payback period = 2 + 6,500 / 9,000 = 2.72 2 . Payback period for A = 2 + 8,000 / 16,000 = 2.50 3 . Payback period for B = 3 + 26,000 / 100,000 = 3.26 4 . Accept A: Yes Accept B: No 5 . = 15.06% 6 . Yes, accept the project because IRR is greater than the required return of 14%. 7. = 5,886.55 8 . = -5,000.00 9. = 1,535.88 10 . = -312.21 11 . NPV = 0, when required rate of return = IRR and when NPV = 0 you would be indifferent between accepting and rejecting the project. IRR = 19.56% 12. = 1,859.13 13 . = 504.63 14 = -521.85 15 . IRR = 24.59%

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Unformatted text preview: 16. = 1,684.81 17. = 2,052.51 18. = 777.76 19. = 967.34 20. = -437.59 21. = -467.59 22 . The cross-over rate is the IRR for the cash flow stream (X-Y) or (Y-X). = 20.74% 23. PI = 1 + NPV/IO = 1.09 24. = 1.02 Ch 9 HW A Solutions 2 25. = 0.93 26. = 1.03 27. = 1.70 28 . = 27,705.63 29. = 6,959.67 30. Project 2 31. Project 1 32. NPV for Cash Flow (A) = 13,092.70 33. NPV for Cash Flow (B) = 2,605.33 34 . IRR for Cash Flow (A) = 33.73% 35. IRR for Cash Flow (B) = 58.57% 36. PI for Cash Flow (A) = 1.65 37. PI for Cash Flow (B) = 2.30 38. Project A...
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