User Account

All Pages

Find both projects net present value using a discount rate

Assignment Help Accounting Basics
Reference no: EM131746550

Question - You are trying to decide whether to invest $5,000 in project A or project B. The after tax cash flows for each project are given below.

Year

Project A

Project B

0

-5,000

-5,000

1

1,000

1,000

2

2,000

1,000

3

2,000

2,500

4

2,500

2,000

a) Find both projects' payback period. Which one would you choose?

b) Find both projects' net present value using a discount rate of 12%. Which one would you choose?

c) Find both projects' benefit/cost ratio. Which one would you choose?

d) Compute project's A net present value using a discount rate of 16%. What is, approximately, the IRR of project A?

Reference no: EM131746550

Questions Cloud

What is the eoq : A retailer of a particular product has estimated its annual sales of the product at 38,000 per year
Research the companys culture : Display the characteristics displayed by your company's abilities as a learning organization. Research the company's culture
Probability that none of the five people saw the meteor : What is the probability that none of the five people saw the meteor? b. What is the probability that at least four people saw the meteor
An objectives of governmental and not-for-profit entities : What are the basic financial reporting objectives of governmental and not-for-profit entities
Find both projects net present value using a discount rate : You are trying to decide whether to invest $5,000 in project A or B. Find both projects' net present value using a discount rate of 12%
What is the probability that the first false start : Suppose there are 26 events at a swimming and diving meet. What is the probability that the first false start will occur at this meet
What happened to change things : In 1600, trials for witchcraft were a common occurrence in many localities in Europe. By 1700, such trials were a rarity. What happened to change things?
Probability that there will be no dead pixels : hat is the probability that there will be no dead pixels - What is the probability that the number of dead pixels will be within two standard deviations
Write an essay comparing any aspect of industrial revolution : Write an essay comparing any aspect of the Industrial Revolution of the nineteenth and twentieth centuries and the modern Information or Computer Revolution.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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