11 Jan Use the PI decision
1.
Compute the NPV for Project M if the appropriate cost of capital is 8 percent.(Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Project M
Time:
0
1
2
3
4
5
Cash flow
–$2,200
$590
$720
$760
$840
$340
Should the project be accepted or rejected?
2.
Compute the NPV statistic for Project Y if the appropriate cost of capital is 13 percent.(Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Project Y
Time:
0
1
2
3
4
Cash flow
–$8,500
$3,450
$4,280
$1,620
$400
Should the project be accepted or rejected?
3.
Compute the NPV statistic for Project U if the appropriate cost of capital is 9 percent.(Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Project U
Time:
0
1
2
3
4
5
Cash flow
–$1,200
$430
$1,680
–$560
$380
–$140
Should the project be accepted or rejected?
4.
Compute the NPV for Project K if the appropriate cost of capital is 7 percent.(Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Project K
Time:
0
1
2
3
4
5
Cash flow
–$11,900
$5,950
$6,950
$6,950
$5,950
–$14,900
Should the project be accepted or rejected?
5.
Compute the payback statistic for Project B if the appropriate cost of capital is 13 percent and the maximum allowable payback period is three years.(Round your answer to 2 decimal places. If the project never pays back, then enter a “0” (zero).)
Project B
Time:
0
1
2
3
4
5
Cash flow
–$11,500
$3,400
$4,280
$1,620
$0
$1,100
Should the project be accepted or rejected?
6.
Compute the payback statistic for Project A if the appropriate cost of capital is 7 percent and the maximum allowable payback period is four years.(Round your answer to 2 decimal places.)
Project A
Time:
0
1
2
3
4
5
Cash flow
–$2,600
$990
$960
$840
$620
$420
Should the project be accepted or rejected?
7.
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 8 percent and the maximum allowable discounted payback period is three years.(Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Project C
Time:
0
1
2
3
4
5
Cash flow
–$2,200
$960
$840
$880
$540
$340
Should the project be accepted or rejected?
8.
Compute the discounted payback statistic for Project D if the appropriate cost of capital is 12 percent and the maximum allowable discounted payback is four years.(Do not round intermediate calculations. Round your final answer to 2 decimal places. If the project does not pay back, then enter a “0” (zero).)
Project D
Time:
0
1
2
3
4
5
Cash flow
–$11,600
$3,410
$4,300
$1,640
$0
$1,120
Should the project be accepted or rejected?
9.
Compute the IRR static for Project E. The appropriate cost of capital is 8 percent.(Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Project E
Time:
0
1
2
3
4
5
Cash flow
–$3,200
$950
$930
$820
$600
$400
Should the project be accepted or rejected?
10.
Compute the IRR for Project F. The appropriate cost of capital is 11 percent.(Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Project F
Time:
0
1
2
3
4
Cash flow
–$11,600
$4,150
$4,980
$2,320
$2,950
Should the project be accepted or rejected?
11.
Compute the MIRR statistic for Project I if the appropriate cost of capital is 13 percent.(Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Project I
Time:
0
1
2
3
4
Cash flow
–$12,100
$5,880
$4,730
$2,070
$2,550
Should the project be accepted or rejected?
12.
Compute the MIRR statistic for Project J if the appropriate cost of capital is 9 percent.(Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Project J
Time:
0
1
2
3
4
5
Cash flow
–$2,300
$740
$2,130
–$650
$690
–$230
Should the project be accepted or rejected?
13.
Compute the PI statistic for Project Z if the appropriate cost of capital is 8 percent.(Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Project Z
Time:
0
1
2
3
4
5
Cash flow
–$1,900
$530
$660
$830
$480
$280
Should the project be accepted or rejected?
14.
Compute the PI statistic for Project Q if the appropriate cost of capital is 11 percent.(Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Project Q
Time:
0
1
2
3
4
Cash flow
–$12,600
$4,150
$4,980
$4,310
$2,950
Should the project be accepted or rejected?
15.
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 7 percent, and that the maximum allowable payback and discounted payback statistics for the project are 2.5 and 3.5 years, respectively.
Time:
0
1
2
3
4
5
6
Cash flow
–$4,700
$1,170
$2,370
$1,570
$1,570
$1,370
$1,170
Use the payback decision rule to evaluate this project. (Round your answer to 2 decimal places.)
Should it be accepted or rejected?
16.
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 7 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively.
Time:
0
1
2
3
4
5
6
Cash flow
–$5,100
$1,240
$2,440
$1,640
$1,640
$1,440
$1,240
Use the discounted payback decision rule to evaluate this project. (Round your answer to 2 decimal places.)
Should it be accepted or rejected?
17.
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 9 percent, and that the maximum allowable payback and discounted payback statistics for the project are 2.0 and 3.0 years, respectively.
Time:
0
1
2
3
4
5
6
Cash flow
–$6,200
$1,030
$2,230
$1,430
$1,430
$1,230
$1,030
Use the IRR decision rule to evaluate this project. (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.)
Should it be accepted or rejected?
18.
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 9 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively.
Time:
0
1
2
3
4
5
6
Cash flow
–$10,200
$2,300
$3,500
$2,700
$2,700
$2,500
$2,300
Use the MIRR decision rule to evaluate this project.(Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Should it be accepted or rejected?
19.
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 7 percent, and that the maximum allowable payback and discounted payback statistics for the project are 2.0 and 3.0 years, respectively.
Time:
0
1
2
3
4
5
6
Cash flow
–$7,200
$1,110
$2,310
$1,510
$1,510
$1,310
$1,110
Use the NPV decision rule to evaluate this project.(Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Should it be accepted or rejected?
20.
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 7 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively.
Time:
0
1
2
3
4
5
6
Cash flow
–$5,300
$1,300
$2,500
$1,700
$1,700
$1,500
$1,300
Use the PI decision rule to evaluate this project.(Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Should it be accepted or rejected?
21.
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 12 percent, and that the maximum allowable payback and discounted payback statistics for your company are 2.5 and 3.0 years, respectively.
Time:
0
1
2
3
4
5
Cash flow
–$228,000
$65,100
$83,300
$140,300
$121,300
$80,500
Use the payback decision rule to evaluate this project.(Round your answer to 2 decimal places.)
Should the project be accepted or rejected?
22.
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 12 percent, and that the maximum allowable payback and discounted payback statistics for your company are 2.5 and 3.0 years, respectively.
Time:
0
1
2
3
4
5
Cash flow
–$227,000
$65,000
$83,200
$140,200
$121,200
$80,400
Use the discounted payback decision rule to evaluate this project.(Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Should it be accepted or rejected?
23.
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 12 percent, and that the maximum allowable payback and discounted payback statistics for your company are 2.5 and 3.0 years, respectively.
Time:
0
1
2
3
4
5
Cash flow
–$348,000
$65,200
$83,400
$140,400
$121,400
$80,600
Use the IRR decision rule to evaluate this project.(Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Should it be accepted or rejected?
24.
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 12 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3 and 3.5 years, respectively.
Time:
0
1
2
3
4
5
Cash flow
–$245,000
$63,800
$82,000
$137,000
$120,000
$79,200
Use the MIRR decision rule to evaluate this project. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Should it be accepted or rejected?
25.
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 11 percent, and that the maximum allowable payback and discounted payback statistics for your company are 2.5 and 3.0 years, respectively.
Time:
0
1
2
3
4
5
Cash flow
–$358,000
$65,500
$83,700
$140,700
$121,700
$80,900
Use the NPV decision rule to evaluate this project. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Should it be accepted or rejected?
26.
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 11 percent, and that the maximum allowable payback and discounted payback statistics for your company are 2.5 and 3.0 years, respectively.
Time:
0
1
2
3
4
5
Cash flow
–$360,000
$65,500
$83,700
$140,700
$121,700
$80,900
Use the PI decision rule to evaluate this project. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Should it be accepted or rejected?
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