Evaluate projects based on the long-term objectives

Reference no: EM13788906

Strategic decision makers are required to be able to evaluate projects based on the long-term objectives of the firm as well as the project's ability to earn the company additional compensation. The 3 main tools used to make this evaluation are the pay-back period, net present value (NPV), and internal rate of return (IRR).

Year	Project #1	Project #2	Project #3
0	($30,000)	($32,000)	($35,000)
1	$11,000	$15,000	$11,000
2	$11,000	$14,000	$11,000
3	$11,000	$11,000	$11,000
4	$11,000	$2,000	$11,000
5	$11,000	$500	$11,000

Scenario	NPV Rate
1	5%
2	5.5%
3	6%

Using the data in the tables above, answer the following questions:

Calculate the NPV for each project using each scenario's NPV rate. Show your work.
Calculate the pay-back period for each project. Show your work.
Calculate the IRR for each project. Show your work.
Which project would the company select using the NPV method in scenario 1? Explain your answer.
Which project would the company select using the NPV method in scenario 2? Explain your answer.
Which project would the company select using the NPV method in scenario 3? Explain your answer.
Which project would the company select using the pay-back period? Explain your answer.
Which project would the company select using the IRR method? Explain your answer.

Reference no: EM13788906

Questions Cloud

Write an argument essay about legalizing marijuana : Write an argument essay about Legalizing marijuana. The word count includes those words from the first word of the introduction paragraph to the last word of the conclusion paragraph.

Differences in stock market and the bond market : Understanding the differences between the stock market and the bond market is essential to managing corporations and investing. In your discussion, answer the following questions:

Define what is the meaning of procedural due process : A key concept in our judicial system is due process, which you will examine in this week's discussion. What is the meaning of "procedural due process?" How did the expansion of the Bill of Rights change due process

Evaluate organization''s facilities with regard to capacity : Evaluate the organization's facilities with regard to capacity and location. Determine whether the organization has enough capacity and whether or not the facilities are strategically located.

Evaluate projects based on the long-term objectives : Strategic decision makers are required to be able to evaluate projects based on the long-term objectives of the firm as well as the project's ability to earn the company additional compensation. The 3 main tools used to make this evaluation are th..

Functions of management in a heath care : How these functions apply to managing others or even yourself in your current or previous job.

Describe the situation from your employer standpoint : Describe the situation from your employer's standpoint, identifying reasons that might support her views. Describe this situation from your standpoint

What is the role of surfactants in application of herbicides : What is the role of "surfactants" in the use/application of herbicides.

Ethical issues based on an accounting issue : For this assignment, choose a company that has had ethical issues based on an accounting issue, such as internal control issues, fraudulent activity, theft, and so forth. Create a PowerPoint presentation that you could share with new hires. For th..

User Account

All Pages