User Account

All Pages

Compute the npv for projects

Assignment Help Finance Basics
Reference no: EM132666361

Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 15%.

Year Deepwater Fishing New Submarine Ride

0 -600,000 -1,800,000

1 270,000 1,000,000

2 350,000 700,000

3 300,000 900,000

as a financial analyst for BRC, you are asked the following questions:

a. Based on the discounted payback period rule, which project should be chosen?

b. If your decision rule is to accept the project with the greater IRR, which project should you use?

c. Since you are fully aware of the IRR rule's scale problem, you calculate the modified IRR (MIRR) for the two projects. Based on your computation, which project should you choose?

d. To be prudent, you compute the NPV for both projects. Which project should you choose? Is it consistent with the MIRR rule?with the MIRR ru

Reference no: EM132666361

Questions Cloud

Show how each transaction would be handled : Show how each transaction would be handled using the cash basis and the accrual basis. Prepaid insurance for August through December, $1,000
Write description of your understanding of human rights : Write a brief description of your understanding of human rights and the rule of law. Be sure to provide examples of each from your own community.
How much would you need to deposit in an account : How much would you need to deposit in an account now in order to have $8,000 in the account in 8 years? Assume the account earns 6% interest compounded monthly.
Find company tax liability for the year : Assuming that 50% of dividend income is taxable and a 25% tax rate, what was the company's tax liability for the year?
Compute the npv for projects : Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 15%
What is the present value of the annuity : What is the present value of the following annuity? $4,012 every year at the end of the year for the next 9 years, discounted back to the present at 4.68 percen
How much net income did ship it transportation inc earn : How much net income did Ship IT Transportation Inc. earn during the year ended December 31, 2016? Prepare the T-account for Retained Earnings
Discussion about a research proposal : Each student will be required to complete the term project, which is a research proposal written in an APA Style. The project should have at least 1000-words.
Why is stock valuation more challenging than bond valuation : Why is stock valuation more challenging than bond valuation? Are dividend paying stocks easier to value than non-dividend paying stocks? Why or why not?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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