Calculate net present value-payback period

Assignment Help Finance Basics
Reference no: EM132747321

Q) Year Project X ($) Project Y ($)

X construction is considering two projects to develop. The estimated net cash flow from each project is as follows:

1 110,000 75,000

2 65,000 150,000

3 100,000 60,000

4 115,000 55,000

5 35,000 60,000

Total 425,000 400,000

Each project requires an investment of $ 200,000.

The cost of capital is 10%.

Require to

a) Calculate Net Present Value, Payback period, ARR and Profitability Index.

b) Which Project is to be recommended to develop based on NPV, Profitability Index, Payback period and ARR? Suggest ach project requires an investment of $ 200,000.

Reference no: EM132747321

Questions Cloud

Research example of cyber terrorism : Using the Web or other resources, research an example of Cyber Terrorism.
Inflation and interest rates : What would you expect the nominal rate of interest to be if the real rate is 4 percent and the expected inflation rate is 7 percent?
Which techniques human resource can be used : Which techniques human resource can be used to analyze the job of a accounting manager in an organization? Explain your answer
Accurately people decode information from graphics : The narrator states that the aims of data visualization is to, "Maximize how quickly and accurately people decode information from graphics."
Calculate net present value-payback period : X construction is considering two projects to develop. The estimated net cash flow from each project is as follows:
Explain the importance of a communication plan : Explain the importance of a communication plan in implementing performance management systems. Describe the key features of a well-prepared communication plan.
What is the annual rate on the bank loan : Neveready Flashlights Inc. needs $450,000 to take a cash discount of 2/10, net 80. What is the annual rate on the bank loan
What is the average duration of liabilities : A Depository Institution (bank) has $ 1 Billion in assets and 10% capital. It has funded itself through capital, checking accounts ($ 450 million) with an avera
What are the three most important tasks that the job needs : What are the three most important tasks that the job needs to perform if the job is to deliver the intended competitive advantage to your customers?

Reviews

Write a Review

Finance Basics Questions & Answers

  What is an example of one thing that could happen today

What is an example of (just) one thing that could happen today in the United States, which would result in a decrease in the Supply (Curve) of a product that yo

  Calculate what is the future value

If you plan to invest $7000 annually for 5 years and the discount rate is 10%.

  Accounting information system

As part of your course project, you are asked to research software for your accounting information system. Conduct research to find two standard packages that you feel may fit your company. Include a minimum of the following:

  Write a paper about ethics in financial reportingrm

Write a paper about Ethics in Financial Reporting. APA format, In cite citation, 2 References, 350 words and Stay on topic.

  What is the probability to survive

Stock return r_stock is either +2500% or -100% with equal probabilities. Find:

  Supply chain strategy for profit to improve

What percentage improvement is needed in the supply chain strategy for profit to improve to $25,000? What is the cost of material with a $25,000 profit?

  Briefly describe integrated accounts payable

Briefly describe Integrated accounts payable, Purchasing/procurement cards, and Imaging services developments in accounts payable and disbursements.

  What is its current stock? price

KMS Corporation has assets with a market value of ?$552 ?million, ?$39 million of which are cash. It has debt of ?$167 ?million

  Bond equivalent and effective annual yield

Find the bond equivalent and effective annual yield to maturity of the bond for the following bond prices.

  What is the pe ratio for lab r doors

What is the PE ratio for Lab R Doors? (Do not round intermediate steps.)

  Estimate the value of division

Estimate Weston's current equity beta and cost of capital. Is this cost of capital useful for valuing Weston's projects? How is Weston's equity beta likely

  Tuttle enterprises is considering a project that has the

tuttle enterprises is considering a project that has the following cash flow and required return data. what is the

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd