Two projects each require a current cash expenditure of $10,000. Project A will generate cash inflows of $2,000 per year for the next twelve years. Project B is expected to return $6,000 in 1 year, $4,000 at the end of year 2, and $3,000 in 3 years
Which project should be selected if funds are unavailable to finance both and capital costs are 6%?
A) Project B because it has a shorter payback period.
B) Project B because it has a higher IRR
C) Project A because it has a higher IRR
D) Project A because it has a higher NPV
E) Project B because it has a higher NPV
D
You might also like to view...
Guo and Saxton define activities that lead to immediate outcomes as social media ______.
A. goals B. objectives C. strategies D. outcomes
Discuss the effects of transactions involving derivatives and the fair value option on the statements of cash flows
Krepps Corporation produces a single product. Last year, Krepps manufactured 20,000 units and sold 15,000 units. Production costs for the year were as follows: Direct materials$170,000Direct labor$110,000Variable manufacturing overhead$200,000Fixed manufacturing overhead$240,000Sales totaled $825,000 for the year, variable selling and administrative expenses totaled $108,000, and fixed selling and administrative expenses totaled $165,000. There was no beginning inventory. Assume that direct labor is a variable cost.The contribution margin per unit was: (Round your intermediate calculations to 2 decimal places.)
A. $25.60 per unit B. $23.80 per unit C. $31.00 per unit D. $19.00 per unit
Explain how DNA testing is useful in some areas