athan Evans1 9/24/18 3:15 PM Homework: Assignment 5 Score: 0 of 10 pts P10-20 (s
ID: 2808501 • Letter: A
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athan Evans1 9/24/18 3:15 PM Homework: Assignment 5 Score: 0 of 10 pts P10-20 (similar to NPV, Save 7 of 10 (0 complete) HW Score: 0%, 0 of 100 pt Question Help * with rankings Botany Bay, Inc, a maker of casual dlothing, is considoring four projects ahown in the tolowing table, EB. Because of past financlal dilicuitlisn, he company has a high cos of capital at 144%. a. Calculate the NPV of each project, using a cost of capital of 144% b. Rank acceptable projects by NPV .Calot te the Rofeach proped and use t to determine tho h otcost of capital at which al ofthe p yots wald be a ptabl. a. Cakulato the NPVofoach project, using a cost of aptal of 14.4%. | O Data Table Click on the loon located on the lop-right comer of the data table below in order to copy its contents int0 a sprodsheot) Initial investment $50,200 300 -Project A Propect B-Protect C- Project D- $180,500 $79,100 Year (n Cash inflows (CF 19,700$35,000 $20,700 100.800 Press Continue to see more 18 Pamaing 19,700 $50,000 $40,100 $50,600 $79.000 $59,100 $19,700 $59 400 ata9 24 2018-1 table 18-1ata-924 2018-1.s ShowExplanation / Answer
a.
NPV of A = -4769.08
IRR = 8.6269%
NPV of B = 2895.01
IRR of B = 16.0367%
NPV of C = 9308.87
IRR = 20.2546%
NPV of D = 7449.32
IRR of D = 17.0993%
b. Only A has negative NPV
c. 8.6269%
Discount rate 14.4000% Cash flows Year Discounted CF= cash flows/(1+rate)^year Cumulative cash flow (50,200.000) 0 (50,200.00) (50,200.00) 19,700.000 1 17,220.28 (32,979.72) 19,700.000 2 15,052.69 (17,927.028) 19,700.000 3 13,157.95 (4,769.08)Related Questions
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