Maxwell Software, Inc., has the following mutually exclusive projects. Year Project A -$22,000 13,000 9,500 3,100…
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Question “Maxwell Software, Inc., has the following mutually exclusive projects. Year Project A -$22,000 13,000 9,500 3,100…”
Maxwell Software, Inc., has the following mutually exclusive projects. Year Project A -$22,000 13,000 9,500 3,100 Project B -$25,000 14,000 10,500 9,500 نادية a-1. Calculate the payback period for each project. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Payback period years Project A Project B years a-2. Which, if either, of these projects should be chosen? O Project A O Project B Both projects Neither project b-1. What is the NPV for each project if the appropriate discount rate is 16 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) NPV Project A Project B b-2. Which, if either, of these projects should be chosen if the appropriate discount rate is 16 percent? O Project A O Project B Both projects Neither project
Answer
fc =SUM:56 B Project A Year Cash flows pv@16% 0. $ (22,000.00), 1 $ 13,000.00 $ (3,100.00), 0.7432 $ 7,060.05, $ 5,500.00 $ (1.747.02) $ 3,600.00 $ (1.747.02) Project C year Cash flows Project B $ Cash flows pv@16% 0.6407 $ 1,986.04 $3,600.00 $ (1.747.02) Payback Period A Payback period B 1+9000/9500/9500/9500/9500/9500/9500/9500/9500/9500/9500/9200 $
E7 fo =SUM (E3:56). 1 Project A 2 years 30 4 1 Cash flows 22000 13000 9500 3100 =D3/1.16=D4/1.16=D5/1.16. NPV Present Value =C3*D3=C4*D4=C5*D5=C6*D6.56. Cumulative cash flows =C3=F3+C4=F4+C5=F5+C6. 9 Project B 10 Year -Payback Period B 19. 20 Payback Period B.
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