Reference no: EM13909388
Using a 4.5% discount rate, calculate the Net Present Value, Payback, Profitability Index, and IRR for each of the investment projects below (note, the inflows are for each year). Based on your calculations rank the projects and support you answer.
Project 1
Initial Invest= $490,000, Cash inflows of $100,000 for years 1-5 and $50,000 for years 6-10.
Project 2
Initial Invest= $970,000, Cash inflows of $400,000 for years 1-3, $0 for years 4-7 and $250,000 for years 8-10.
Project 3
Initial Invest= $820,000, Cash inflows of $300,000 for years 1-5, $0 for years 6-9 and $100,000 for year 10.
(Part 2)
Assuming a budget of $1,100,000 what are your recommendations for the three projects in the above problem. Explain.
Assuming a budget of $2,200,000 what are your recommendations for the above problem? Explain.
|
Specializes in voice recognition software
: Voice App is a midsize software company that specializes in voice recognition software. Due to rising costs of maintaining IT technical support, your director is considering outsourcing your technical support services. Include all costs you must cal..
|
|
What is the standard deviation of the rate of return
: A project has a 0.76 chance of doubling your investment in a year and a 0.24 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment?
|
|
Simple interest on its savings account balances
: First City Bank pays 7 percent simple interest on its savings account balances, whereas Second City Bank pays 7 percent interest compounded annually. If you made a $6,000 deposit in each bank, how much more money would you earn from your Second City ..
|
|
A jeans maker is designing a new line
: A jeans maker is designing a new line of jeans called the Slims.
|
|
Discount rate-calculate the net present value and payback
: Using a 4.5% discount rate, calculate the Net Present Value, Payback, Profitability Index, and IRR for each of the investment projects below (note, the inflows are for each year). Based on your calculations rank the projects and support you answer.
|
|
Calculate value of trade receivables under existing scheme
: Calculate the approximate equivalent annual percentage cost of a discount of 2%, which reduces the time taken by credit customers to pay from 70 days to 30 days.
|
|
Draw a wireframe polygon using bresenham algorithm
: In this project, you will implement a program that will do three things: Allows the user to draw a wireframe polygon (i.e., series of lines) using Bresenham's line drawing algorithm. Allows the user to change the current drawing color (for items alre..
|
|
The dividends are expected to grow at a constant rate
: The Jackson–Timberlake Wardrobe Co. just paid a dividend of $1.60 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year indefinitely. Investors require a return of 10 percent on the company's stock
|
|
Firm needs a computerized machine tool lathe
: Your firm needs a computerized machine tool lathe which costs $50,000 and requires $12,000 in maintenance for each year of its 3-year life. After three years, this machine will be replaced. The machine falls into the MACRS 3-year class life category...
|