2. 13 FB Company is considering investing in two construction projects, and he developed the following estimates of the cash flows. His required return is 10% and views these nswered ut of projects as equally risky. Project 1 cash flows -$550,000 Project 2 cash flows -%24700,000 uestion Year $150,000 1. 000'000 $150,000 $150,000 000'000 $150,000 000'osz$ 4 000'OST$ 000'OST$ 000'00T$ Required: a) Calculate the net present value (NPV) of each project, assess its acceptability, and indicate which project is best using NPV. b) Calculate the profitability index (PI) of each project, assess its acceptability, and indicate which project is best using Pl. c) If both the projects have recorded a positive NPV value and the projects are mutually exclusive, which projects would you recommend for FB Company to undertake? Why? 謝 近 0 N
2. 13 FB Company is considering investing in two construction projects, and he developed the following estimates of the cash flows. His required return is 10% and views these nswered ut of projects as equally risky. Project 1 cash flows -$550,000 Project 2 cash flows -%24700,000 uestion Year $150,000 1. 000'000 $150,000 $150,000 000'000 $150,000 000'osz$ 4 000'OST$ 000'OST$ 000'00T$ Required: a) Calculate the net present value (NPV) of each project, assess its acceptability, and indicate which project is best using NPV. b) Calculate the profitability index (PI) of each project, assess its acceptability, and indicate which project is best using Pl. c) If both the projects have recorded a positive NPV value and the projects are mutually exclusive, which projects would you recommend for FB Company to undertake? Why? 謝 近 0 N
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter26: Capital Investment Analysis
Section: Chapter Questions
Problem 3CMA
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