- 3 Below Are Cash Flows For Projects Xx And Z Projects Year X Y Z 0 5 5 5 0 5 0 2 6 0 4 5 3 5 7 A Calculate T 1 (7.67 KiB) Viewed 51 times
3. Below are cash flows for projects XX, and Z: Projects Year X Y Z 0 -5 -5 -5 0 5 0 2 6 0 4 -5 3 5 7
(a). Calculate the payback period and net present value for project X and Y (assume a 14% discount rate). Which project is preferred under each financial appraising method? (2 marks) (b) If A and B are mutually exclusive and C is independent, which combination of projects, is preferred using the payback method and the net present value method? Comment on your answer. (3 marks) = (C) Assume coupon rate=5%, marginal tax rate = 40%, and B=500, rate of returns on stock= 25%, and S=500. Compute the WACC k=WACC=ku(1 - ) [B/B + S)] + Ks [S/(B + S)] (2 marks) +