Chapter 13 3 Suppose Your Firm Considering Two Mutually

47.

Suppose your firm is considering two mutually exclusive, required projects with the cash

flows shown as follows. The required rate of return on projects of both of their risk class is

10 percent, and the maximum allowable payback and discounted payback statistic for the

projects are two and a half and three and a half years, respectively.

Use the NPV decision rule to evaluate these projects; which one(s) should be accepted or

rejected?

48.

Suppose your firm is considering two mutually exclusive, required projects with the cash

flows shown as follows. The required rate of return on projects of both of their risk class is

10 percent, and the maximum allowable payback and discounted payback statistic for the

projects are two and a half and three and a half years, respectively.

Use the PI decision rule to evaluate these projects; which one(s) should be accepted or

rejected?

49.

Suppose your firm is considering two mutually exclusive, required projects with the cash

flows shown as follows. The required rate of return on projects of both of their risk class is

8 percent, and the maximum allowable payback and discounted payback statistic for the

projects are two and three years, respectively.

Use the payback decision rule to evaluate these projects; which one(s) should be

accepted or rejected?

50.

Suppose your firm is considering two mutually exclusive, required projects with the cash

flows shown as follows. The required rate of return on projects of both of their risk class is

8 percent, and the maximum allowable payback and discounted payback statistic for the

projects are two and three years, respectively.

Use the discounted payback decision rule to evaluate these projects; which one(s) should

be accepted or rejected?

51.

Suppose your firm is considering two mutually exclusive, required projects with the cash

flows shown as follows. The required rate of return on projects of both of their risk class is

8 percent, and the maximum allowable payback and discounted payback statistic for the

projects are two and three years, respectively.

Use the IRR decision rule to evaluate these projects; which one(s) should be accepted or

rejected?

52.

Suppose your firm is considering two mutually exclusive, required projects with the cash

flows shown as follows. The required rate of return on projects of both of their risk class is

8 percent, and the maximum allowable payback and discounted payback statistic for the

projects are two and three years, respectively.

Use the MIRR decision rule to evaluate these projects; which one(s) should be accepted

or rejected?

53.

Suppose your firm is considering two mutually exclusive, required projects with the cash

flows shown as follows. The required rate of return on projects of both of their risk class is

8 percent, and the maximum allowable payback and discounted payback statistic for the

projects are two and three years, respectively.

Use the NPV decision rule to evaluate these projects; which one(s) should be accepted or

rejected?

54.

Suppose your firm is considering two mutually exclusive, required projects with the cash

flows shown as follows. The required rate of return on projects of both of their risk class is

8 percent, and the maximum allowable payback and discounted payback statistic for the

projects are two and three years, respectively.

Use the PI decision rule to evaluate these projects; which one(s) should be accepted or

rejected?

55.

Suppose your firm is considering two independent projects with the cash flows shown as

follows. The required rate of return on projects of both of their risk class is 12 percent, and

the maximum allowable payback and discounted payback statistic for the projects are two

and a half and three years, respectively.

Use the payback decision rule to evaluate these projects; which one(s) should be

accepted or rejected?

56.

Suppose your firm is considering two independent projects with the cash flows shown as

follows. The required rate of return on projects of both of their risk class is 12 percent, and

the maximum allowable payback and discounted payback statistic for the projects are two

and a half and three years, respectively.

Use the discounted payback decision rule to evaluate these projects; which one(s) should

be accepted or rejected?

57.

Suppose your firm is considering two independent projects with the cash flows shown as

follows. The required rate of return on projects of both of their risk class is 12 percent, and

the maximum allowable payback and discounted payback statistic for the projects are two

and a half and three years, respectively.

Use the IRR decision rule to evaluate these projects; which one(s) should be accepted or

rejected?

58.

Suppose your firm is considering two independent projects with the cash flows shown as

follows. The required rate of return on projects of both of their risk class is 12 percent, and

the maximum allowable payback and discounted payback statistic for the projects are two

and a half and three years, respectively.

Use the MIRR decision rule to evaluate these projects; which one(s) should be accepted

or rejected?

59.

Suppose your firm is considering two independent projects with the cash flows shown as

follows. The required rate of return on projects of both of their risk class is 12 percent, and

the maximum allowable payback and discounted payback statistic for the projects are two

and a half and three years, respectively.

Use the NPV decision rule to evaluate these projects; which one(s) should be accepted or

rejected?

60.

Suppose your firm is considering two independent projects with the cash flows shown as

follows. The required rate of return on projects of both of their risk class is 12 percent, and

the maximum allowable payback and discounted payback statistic for the projects are two

and a half and three years, respectively.

Use the PI decision rule to evaluate these projects; which one(s) should be accepted or

rejected?

61.

Compute the NPV statistic for Project Y given the following cash flows and if the

appropriate cost of capital is 10 percent.

Project Y

62.

Compute the NPV statistic for Project U given the following cash flows and if the

appropriate cost of capital is 9 percent.

Project U

63.

Compute the MIRR statistic for Project I and note whether to accept or reject the project

with the cash flows shown as follows if the appropriate cost of capital is 15 percent.

Project I

64.

Compute the MIRR statistic for Project J and advise whether to accept or reject the

project with the cash flows shown as follows if the appropriate cost of capital is 10

percent.

Project J

65.

Compute the PI statistic for Project Z and advise the firm whether to accept or reject the

project with the cash flows shown as follows if the appropriate cost of capital is 10

percent.

Project Z

66.

Compute the PI statistic for Project Q and advise the firm whether to accept or reject the

project with the cash flows shown as follows if the appropriate cost of capital is 12

percent.

Project Q