User Account

All Pages

Evaluating two projects for year capital budget

Assignment Help Finance Basics
Reference no: EM131167594

A firm with a 14% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows:

                            0          1          2           3        4          5

  • Project A $6,000 $2,000 $2,000 $2,000 $2,000 $2,000
  • Project B $18,000 $5,600 $5,600 $5,600 $5,600 $5,600

a) Calculate NPV, IRR, MIRR, payback, and discounted payback for each project.

b) Assuming the projects are independent, which one(s) would you recommend?

c)  If the projects are mutually exclusive, which would you recommend?

d)  Notice that the projects have the same cash flow timing pattern. Why is there a conflict between NPV and IRR?

Reference no: EM131167594

Questions Cloud

Find confidence interval for the relevant population : Does this interval estimate suggest that there has been a change in the proportion of students who graduate within four years? Why or why not?
How will each drink affect the body state of hydration : Two people with same degree of body hydration each reach for a drink on a hot day. One drinks a can of lemonade, the other a can of beer. How will each drink affect the body's state of hydration
Why would the saving rate, generally depend on k : Dependence of the saving rate, population growth rate and depreciation rate on the capital intensity Assume that the production function satisfies the neoclassical properties
Similarities between the male and female reproductive system : Describe at least 3 similarities between the male and female reproductive systems. This could be hormones, structures, genetics, etc
Evaluating two projects for year capital budget : A firm with a 14% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows:
Analyze the benefits afforded to health care marketers : Based on your review of the Learnscape scenario titled "Learnscape 2: Patient Engagement", analyze the benefits afforded to health care marketers that understand the importance of establishing core values.
What conditions is the statement accurate : Consider this statement: "Devoting a larger share of national output to investment would help to restore rapid productivity growth and rising living standards." Under what conditions is the statement accurate?
Which type of epithelium lines the trachea : The neural control centers for respiration connect to the diaphragm by way of: Which 2 bones make up the floor of the nasal cavity
Identify the null and alternative hypotheses : Identify the null and alternative hypotheses from the player's point of view. - Is there enough evidence from this month's data to reject the null hypothesis at the 5% significance level?

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