Calculate the irr of each project

Reference no: EM13204194

All techniques, conflicting rankings. Nicholson Roofing Materials, Inc., is considering two mutually exclusive projects, each with an incremental cost of $150,000. The company's board odirectors has set a 4-year payback requirement and the company's cost of capital is 9 percent. The cash inflows associated with the two projects are as follows:

Year	Project A cash inflows (CFt)	Project B cash inflows (CFt)
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 the payback period for each project.

b. Calculate the NPV of each project.

c. Calculate the IRR of each project.

d. Rank the project using each of the techniques. Make and justify a recommendation.

Reference no: EM13204194

Questions Cloud

Compute the amount of money : The cost of one lunch ticket is $2.25. What is the equation the student could use to calculate the amount of money, m, left after d days, assuming the student uses one lunch ticket each day?

Determine share of national output accruing to native worker : Suppose that the demand for labor in an economy is Ld = 100 10W, where W = wage in dollars per hour and L = number of workers. The labor supply of native workers is 50 million, and it is perfectly inelastic. Suppose that this economy experiences a..

What is the maximum number of hours the crane can be used : What is the maximum number of hours the crane can be used each day if the rental cost is not to exceed $2500 per day?

Find out the control limits for the mean and range : Determine the control limits for the mean and range, and, how you would plot the control limits for the mean outside diameter and the range. Are there any points that are "out of control"?

Calculate the irr of each project : Calculate the payback period for each project, calculate the NPV of each project and calculate the IRR of each project.

How to determine the least costly alternative : Two production lines are under evaluation. One uses waterjet cutting technology and has an initial cost of $100,000 , an annual operating cost of $10,000 , a useful life of 5years, and a salvage value of $70,000 at the end of 5years.

State what combination of scoring accounted for the lakers : There were 11 times as many two-point baskets as three-point baskets and five times as many free-throws as three-point baskets. What combination of scoring accounted for the Lakers

What yearly payment would make the two offers identical : Which payment option should the company choose and what yearly payment would make the two offers identical

State simple pendulum is related to the length l : simple pendulum is related to the length L (in feet) of the pendulum by the formula 87t^2=(3.14)^2L. If a child is on a swing with a 10 foot chain, then how long does it take to complete on cycle on the swing?

User Account

All Pages