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AB Enterprises is trying to select the best investment from among four alternatives. Each alternative requires an initial outlay of $100,000. Their...
11. A&B Enterprises is trying to select the best investment from among four alternatives. Each alternative requires an initial outlay of $100,000. Their cash flows are as follows:Project AYear 1: $10,000Year 2: $20,000Year 3: $30,000Year 4: $40,000Year 5: $50,000Project BYear 1: $50,000Year 2: $40,000Year 3: $30,000Year 4: $0Year 5: $0Project CYear 1: $25,000Year 2: $25,000Year 3: $25,000Year 4: $25,000Year 5: $25,000Project DYear 1: $0Year 2: $0Year 3: $45,000Year 4: $55,000Year 5: $60,000Evaluate and rank each of the four projects based on (a) payback period, (b) net present value (use a 10% discount rate), and (c) internal rate of return. You will have to use Excel or a financial calculator to determine the IRR. You are welcome to use Excel or a financial calculator to determine the NPV.11. A&B Enterprises is trying to select the best investment from amongfour alternatives. Each alternative requires an initial outlay of$100,000. Their cash flows are as follows:Project AYear 1: $10,000Year 2: $20,000Year 3: $30,000Year 4: $40,000Year 5: $50,000Project BYear 1: $50,000Year 2: $40,000Year 3: $30,000Year 4: $0Year 5: $0Project CYear 1: $25,000Year 2: $25,000Year 3: $25,000Year 4: $25,000Year 5: $25,000Project DYear 1: $0Year 2: $0Year 3: $45,000Year 4: $55,000Year 5: $60,000Evaluate and rank each of the four projects based on (a) payback period,(b) net present value (use a 10% discount rate), and (c) internal rateof return. You will have to use Excel or a financial calculator todetermine the IRR. You are welcome to use Excel or a financialcalculator to determine the NPV.
