Homework: Assignment 5 Score: 0 of 10 pts P10-20 (similar to) Save 47 of 10 (5 c

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Homework: Assignment 5 Score: 0 of 10 pts P10-20 (similar to) Save 47 of 10 (5 complete) HW Score: 41.67%. 41.67 of 100 pts Question Help * Botany Bay Inc a maker of casual clothing, is considering four pr N V, with rankings of capital at 14.1%. ots shown ithe fol wing table, Becauso of past fina cal d to company has a high cost cutie, a. Calculate the NPV of each project using a cost of capital of 14.1%. b. Rank acceptable projects by NPV c. Calculate the IRR of each project and use it to determine the highest cost of capital at which all of the projects would be acceptable. a. Calculate the NPV of each project. usng acost of capital of 14.1%. Press Continue to see more. 18 Pemsaining parts Continue

Explanation / Answer

Hello Sir/ Mam

(a) , (b) & (c)

The Present Value Schedule :

At cost of capital upto 12.28%, all the projects will be acceptable.

I hope this solves your doubt.

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Project A Project B Project C Project D Time Present Value Factor Cash Flows Present Values Cash Flows Present Values Cash Flows Present Values Cash Flows Present Values 0 1.000 -$49,000.00 -$49,000.00 -$99,100.00 -$99,100.00 -$80,400.00 -$80,400.00 -$180,100.00 -$180,100.00 1 0.876 $20,500.00 $17,966.70 $35,000.00 $30,674.85 $19,300.00 $16,914.99 $99,500.00 $87,204.21 2 0.768 $20,500.00 $15,746.45 $51,600.00 $39,634.96 $39,000.00 $29,956.66 $80,500.00 $61,833.61 3 0.673 $20,500.00 $13,800.57 $50,400.00 $33,929.20 $59,100.00 $39,786.02 $59,700.00 $40,189.94 a) Total NPV -$1,486.29 $5,139.00 $6,257.67 $9,127.76 b) Acceptable/ Not Acceptable N/A A A A Ranks 3 2 1 c) IRR 12.28% 16.99% 17.96% 17.38%

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