Assignment
Business, Finance - Year 3
Finance Questions
"Caladonia Products" Integrative Problem
Caledonia is considering two additional mutually exclusive projects. The cash flows associated with these projects are as follows:
YEAR PROJECT A PROJECT B
0 -$100,000 -$100,000
1 32,000 0
2 32,000 0
3 32,000 0
4 32,000 0
5 32,000 $200,000
The required rate of return on these projects is 11 percent
Formulate answers and show all work
1) What is each project's payback period?
2) What is each project's net present value?
3) What is each project's internal rate of return?
4) What has caused the ranking conflict?
5) Which project should be accepted? Why?
6) Describe the factors that Caladonia would have to consider if they were doing a lease versus buy for the two projects.
Format your assignment according to the give formatting requirements:
1. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the course title, the student's name, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.