Solution-Evaluating the two projects

Evaluating the two projects

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Reference no: EM133205356

TV-ABMA 5 Corporation, a business that is currently operating as the biggest media in the country is currently evaluating two possible TV shows for its prime-time. The show is planned to be played from 7:00pm-8:00pm every weekdays. The first option is a reality show that will run for three years and the other is a telenovela that will run for four years. Listed below are the expected cash outflows and cash inflows of both projects.

	Reality show		Telenovela
	Inflow	Outflow	Inflow	Outflow
Initial investment	Php150,000	Php300,000	Php150,000	Php400,000
Year
1	100,000	15,000	90,000	10,000
2	90,000	10,000	120,000	15,000
3	120,000	10,000	100,000	20,000
4			130,000	25,000

As the financial adviser of the company, what capital budgeting technique are you going to use in evaluating the two projects? Justify why you would use such method.
Using the technique that you choose (your answer in number one), which of the two projects will you choose?

Reference no: EM133205356

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Evaluating the two projects

Reference no: EM133205356

Reference no: EM133205356

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