Tri Star, Inc., has the following mutually exclusive projects
Question # 00099331
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Updated on: 08/31/2015 10:09 PM Due on: 09/30/2015
| Tri Star, Inc., has the following mutually exclusive projects: |
| Year | Project A | Project B | |||||
| 0 | –$ | -14,000 | –$ | -9,400 | |||
| 1 | 8,600 | 4,100 | |||||
| 2 | 7,200 | 3,600 | |||||
| 3 | 2,100 | 6,000 | |||||
Calculate the payback period for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) |
| Payback Period | |
| Project A | years |
| Project B | years |
Based on the payback period, which project should the company accept? | ||
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| If the appropriate discount rate is 12 percent, what is the NPV for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) |
| NPV | |
| Project A | $ |
| Project B | $ |
Based on the NPV, which project should the company accept? | ||
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Rating:
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Solution: Tri Star, Inc., has the following mutually exclusive projects