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Author Question: Garvin Enterprises is considering a project that has the following cash flow and WACC data. What is ... (Read 46 times)

petersan

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Question 1

Flint Fruits is considering two equally risky, mutually exclusive projects, Projects A and B, that have the following cash flows:

Year

Project A

Project B

0

–$130,000

–$130,000

1

52,000

40,000

2

40,000

25,000

3

80,000

93,000

4

50,000

71,000

At what WACC would the two projects have the same NPV?


10.06%


10.73%


11.21%


11.82%



Question 2

Garvin Enterprises is considering a project that has the following cash flow and WACC data. What is the project’s discounted payback?

WACC:10.00%   
Year:

0

1

2

3

Cash flows:

–$1,300

$600

$600

$600


2.01 years


2.14 years


2.38 years


2.57 years



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Marked as best answer by petersan on Aug 7, 2023

3ginamay

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petersan

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Reply 2 on: Aug 7, 2023
YES! Correct, THANKS for helping me on my review


31809pancho

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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