User Account

All Pages

Calculate payback period for project

Assignment Help Business Management
Reference no: EM132955704

A company is considering two mutually exclusive projects, each with an initial investment of $150,000. The company has set a 4 year maximum payback period, while its cost of capital is 9%. The cash flows are shown in the below table.

Cash Inflows
Year
Project A
Project B
1
$45,000
$75,000
2
$45,000
$60,000
3
$45,000
$30,000
4
$45,000
$30,000
5
$45,000
$30,000
6
$45,000
$30,000

a. Calculate payback period for each project

b. Calculate the NPV for each project at 0%

c. Calculate the NPV for each project at 9%

d. Derive the IRR of each project

e. Rank the projects by each of the techniques used. Make and justify a recommendation.

Reference no: EM132955704

Questions Cloud

Investors pre-tax and after-tax holding period return : Stock Return (calculate the pre-tax and after-tax holding period return. Investors buys 30 shares of stock priced at $90 and sell the stock 6 months later for
Estimate the fcfe of dexia : You have been asked to value Dexia Financials, a small, high growth bank, and are told that Dexia generated $150 million in net income in the most recent year o
What is the value of company x stock : Q1: The cost of capital for a firm with a 60/40 debt/equity split, 4.5% cost of debt, 15% cost of equity, and a 35% tax rate would be
Capital budgeting decisions and enterprise cost of capital : 1) Discuss the connection between capital budgeting decisions and the enterprise's cost of capital.
Calculate payback period for project : a. Calculate payback period for each project b. Calculate the NPV for each project at 0%
Describe the taylor rule and explain its importance : 1. Explain why the Fed was generally so ineffective before the late 1980s.
Find the probability of getting 16 non-defective items : he mean and variance of defective items is 0.81 and 0.87768. Find the probability of getting 16 non-defective items.
What is the npv of leasing the machine : a. Uder Inc. is considering the possibility of refunding its $320 million outstanding bond. This bond has coupon rate of 15% (assume all coupons are paid annual
Evaluate the firm financial performance : Ratio analysis enables stockholders, lenders, and the firm's managers to evaluate the firm's financial performance. Compare and contrast who uses financial rati

Reviews

Write a Review

Business Management Questions & Answers

  Job opportunities in greece

Assume you had to write a paper on job chances in Greece. Conduct an Internet search on the topic. Which search engine and website did you use?

  Why is understanding the time value of money

Why is understanding the time value of money is crucial for evaluating a company's future projects? Assume you are the CFO of company

  Southgate hospital accident & emergency department

Southgate Hospital Accident & Emergency Department (A&E) provides a point of entry in to the hospital for patients. Patients can arrive through 2 routes: they can arrive via their own transportation or they can be brought in by ambulance. On entry to..

  Understanding and coping with change

Change is everywhere, yet very few people seem to embrace the concept. We are, for the most part, creatures of habit and follow daily routines. When change occurs, our activities and thought patterns are disrupted.

  Important to look at consumer behavior as a system

Important to look at consumer behavior as a system - how important do you think it is to look at consumer behavior from a systems perspective

  Discuss why you selected that particular career

Discuss why you selected that particular career, your strengths and weakness concerning the career, and your concerns about the career.

  Matrix form of organizational design

Matrix form of organizational design - What are some of the advantages and other disadvantages of this type of design?

  Describe specific qualitative methods and tools

Describe specific qualitative methods and tools that could be used within your discipline to gather data. Include your rationale.

  Illustrate what is the probability of newspaper sample

Illustrate what is the probability the newspaper's sample will lead the newspaper to predict defeat of the referendum i.e. illustrate what is the probability which the newspaper's sample results in a sample proportion less than 0.50 in favour of t..

  What did you learn about philosophy

What did you learn about philosophy and what does it mean to you? What could it mean for your mother?

  List the current services not covered by medicare

List the current services not covered by Medicare that require the completion of an ABN.

  Technology helps canada goose keep flying high

That's the title of a page at Canada-Goose.com where anyone can paste a URL and find out if it belongs to a legitimate reseller of the company's famous winter c

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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