View the step-by-step solution to:

**Use cash flow projections below in answering question #'s 1-3** The following two mutually-exclusive business opportunities are currently under

**Use cash flow projections below in answering question #'s 1-3** 


  The following two mutually-exclusive business opportunities

  are currently under consideration by your firm, The Sharper

  Investor. The accounting department has forecasted pro forma

 cash flows for both projects accoding to the following table:

 (each project is to be funded to require a discount rate of 15%)

    Year        Cash Flow (A)       Cash Flow (B)   _

     0          -$525,000           -$60,000

     1             30,000             30,000

     2             75,000             15,000

     3             75,000              9,000

     4          1,125,000              3,000

1. Discounted payback of Project A (above) equals:

2. What is Project A's Internal Rate of Return (SHOW ALL WORK)?


3. The Profitability Index for Project B equals?

Can you show me the answer with all the working, thank you.



Top Answer

1.  Discounted payback  of Project A (above) equals: Discounted payback project is after 1st year cash flow how much time... View the full answer

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.


Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online