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Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you...

Question:

Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been

Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 7%. 3 Project A -1,020 670 310 240 290 Project B -1,020 270 245 390 740 What is Project A's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. What is Project B's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. 2$ If the projects were independent, which project(s) would be accepted? -Select- If the projects were mutually exclusive, which project(s) would be accepted? -Select-

Answers

discounted cash flows YEAR A -$1,020 $670 $310 $240 $290 cash flows B -$1,020 $270 $245 $390 $740 NPV pv @ 7% 1.0000 0.9346 0

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