7. A firm with a 14% cost of capital is evaluating two projects for this year's capital budget. After tax cash flows, including depreciation, are as follows: -P30,000 10,000 35,000 10,000 10,000 Project M Project J -P90,000 35,000 35,000 a. Calculate NPV, IRR, payback for each project. b. Assuming the projects are independent, which one(s) would you recommend? c. If the projects are mutually exclusive, which would you recommend?
7. A firm with a 14% cost of capital is evaluating two projects for this year's capital budget. After tax cash flows, including depreciation, are as follows: -P30,000 10,000 35,000 10,000 10,000 Project M Project J -P90,000 35,000 35,000 a. Calculate NPV, IRR, payback for each project. b. Assuming the projects are independent, which one(s) would you recommend? c. If the projects are mutually exclusive, which would you recommend?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 10P: Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year...
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