Question: All techniques-Decision among mutually exclusive investments Pound Industries is attempting to select the best of three mutually exclusive projects. The initial investment and? after-tax cash inflows associated with these projects are shown in the following table.
|
Cash flows
|
Project A
|
Project B
|
Project C
|
|
|
Initial investment (CF)
|
$40,000
|
|
$80,000
|
|
$80,000
|
|
| Cash inflows (CF),
t equals=1
to 5 |
$15,000
|
|
$27,000
|
|
$28,000
|
|
WACC NOT GIVEN.
a. The payback period of project A is ______ years. (Round to two decimal places.)
The payback period of project B is _____ years. (Round to two decimal places.)
The payback period of project C is ______ years. (Round to two decimal places.)
b. The NPV of project A is $______. (Round to the nearest cent.)
The NPV of project B is $______. (Round to the nearest cent.)
The NPV of project C is $______. (Round to the nearest cent.)
c. The IRR of project A is ____%. (Round to two decimal places.)
The IRR of project B is ______%. (Round to two decimal places.)
The IRR of project C is ______%. (Round to two decimal places.)
d. Which project would you recommend?(Select the best answer below.)
A. Project C
B. Project B
C. Project A