Norwood,Inc. ,which has a hurdle rate of 12%,is considering three different independent investment opportunities.Each project has a seven-year life.The annual cash flows and initial investment for each of the projects are as follows:
a.What is the present value of the annual cash flows for each of the three projects?
b.What is the net present value of each of the projects?
c.What is the profitability index of each of the projects? (Round to two decimal places. )
d.In what order should Norwood prioritize investment in the projects?

Question

Norwood,Inc. ,which has a hurdle rate of 12%,is considering three different independent investment opportunities.Each project has a seven-year life.The annual cash flows and initial investment for each of the projects are as follows:
  a.What is the present value of the annual cash flows for each of the three projects?
b.What is the net present value of each of the projects?
c.What is the profitability index of each of the projects? (Round to two decimal places. )
d.In what order should Norwood prioritize investment in the projects?

Quizplus · Accepted Answer

The Answer of Norwood,Inc. ,which has a hurdle rate of 12%,is considering three different independent investment opportunities.Each project has a seven-year life.The annual cash flows and initial investment for each of the projects are as follows:
  a.What is the present value of the annual cash flows for each of the three projects?
b.What is the net present value of each of the projects?
c.What is the profitability index of each of the projects? (Round to two decimal places. )
d.In what order should Norwood prioritize investment in the projects?