Independent investment opportunities

Assignment Help Finance Basics
Reference no: EM132245288

Suppose the following two independent investment opportunities are available to Scott, Inc. The appropriate discount rate is 8 percent.

Year   Project Alpha Project Beta0

0 -$2,500     -$4,100    

1 11,300     850   

2  21,200     2,500   

3  3950     3,000    

Compute the profitability index for each of the two projects. (Do not round intermediate calculations. Round your answers to 3 decimal places (e.g., 32.161).)

Profitability Index  Project Alpha______    Project Beta______  

Which project(s) should the company accept based on the profitability index rule?  Both projects/Project Beta/Neither project/Project Alpha

Reference no: EM132245288

Questions Cloud

In what specific ways individual leadership could be improve : In what specific ways do you feel this individual was an effective leader? In what specific ways do you feel this individual's leadership could be improved?
What is the price of a share of company miami stock : If stocks of similar company earn 12% annual return, what is the price of a share of Company Miami stock?
Most effective organizations have narrow span of control : Administrative theorists concluded many decades ago that the most effective organizations have a narrow span of control.
The us equal employment opportunity commissions criteria : Identify and describe a case in which an employer's activities were restricted due to age related rights of employees.
Independent investment opportunities : Suppose the following two independent investment opportunities are available to Scott, Inc. The appropriate discount rate is 8 percent.
Tree software and sensitivity analysis and spider plots : Based off this information create a decision tree using precision tree software and sensitivity analysis and spider plots
Investing decisions because more value is generated : In some ways a firm's financing decisions are less important than its investing decisions because more value is generated from a firm
Commercial property and commercial general liability : The insurance companies providing commercial crime, commercial property, commercial general liability
Identify the types of drug testing used by employers : What are the key issues in an employee alcohol- and drug-testing program? Identify the types of drug testing used by employers, and explain the general steps.

Reviews

Write a Review

Finance Basics Questions & Answers

  Difference between net working capital and cash

What is the difference between net working capital and cash?

  Why did geosonic recognise a foreign exchange loss

Why did Geosonic recognise a foreign exchange loss of ¥165 billion in its income statement (for the year to 31 March x6), given that ACM was an autonomous unit of Geosonic?

  Provide a diagram of the financial planning process

Determine client expectations and requirements with respect to financial markets advice - Develop an awareness of the clients situation and Obtain relevant knowledge of client's financial position and risk profile

  Income from canceled debt

In which case will Jenny and Justin Tucker be able to exclude all income from their canceled debt?

  Discuss what other financing alternatives are available

Determine whether Workbrain should prepare for an IPO and Determine if now right time is for an IPO - Determine which exchange would serve company

  What is its total corporate value

The company owns marketable securities of $100 million. It is financed with $200 million of debt, $50 million of preferred stock, and $210 million of book equity.

  Lower and upper limits

compute a 99% confidence interval for the proportion of allindividuals in this city who are dissatisfied with their working conditions. What are the lower and upper limits of the 99% confidence interval?

  What is the bank projected net liquidity position

Suppose that a bank faces the following cash inflows and outflows during the coming week: deposit withdrawals are expected to total $33 million.

  Determine the amount that should be recorded for new vehicle

Tony and Suzie see the need for a rugged all-terrain vehicle to transport participants and supplies. They would love to buy a Hummer.

  Find an amount that will grow with inflation

You will also need to buy renter's insurance, which will cost $15 per month, an amount that will grow with inflation. Assume inflation will be about 2% APR.

  Current dividend per share

If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share?

  Why is the accomplishment of life-cycle costing important

Describe the overall process (i.e., steps) that you would apply in the design and development of a SOS configuration. What tools/techniques would you apply as an aid in the accomplishment of such?

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd