· c . Rank the presses from best to worst using NPV .
· d . Calculate the profitability index ( PI ) for each press .
· e . Rank the presses from best to worst using PI .
P10 – 14 Internal rate of return For each of the projects shown in the following table , calculate the internal rate of return ( IRR ). Then indicate , for each project , the maximum cost of capital that the firm could have and still find the IRR acceptable .
Project A |
Project B |
Project C |
Project |
D |
|
|
|
Initial investment ( CF0 ) |
$ 90,000 |
$ 490,000 |
$ 20,000 |
$ 240,000 |
Year ( t ) |
Cash inflows ( CFt ) |
1 $ 20,000 $ 150,000 $ 7,500 $ 120,000
2 25,000 150,000 7,500 100,000
3 30,000 150,000 7,500 80,000
4 35,000 150,000 7,500 60,000
5 40,000 — 7,500 —
P10 – 21 All techniques , conflicting rankings Nicholson Roofing Materials , Inc ., is considering two mutually exclusive projects , each with an initial investment of $ 150,000 . The company ’ s board of directors has set a maximum 4-year payback requirement and has set