User Account

All Pages

Solve the payback period for each project

Assignment Help Financial Accounting
Reference no: EM132588371

The proposed planned expansion into the Asian countries would require manufacturing plants being set up in Vietnam, in this regard the production team are attempting to select the best of two mutually exclusive projects.

The initial investment and after-tax cash inflows associated with these projects are shown in the following table:

Cash flows                                   Project A                       Project B

Initial investment (CF 0)             $60,000                      $100,000

Cash inflows (CFt), t1 to 5           $20,000                    $ 31,500

You are required to:

Question 1) In the context of capital budgeting, explain why capital investment decisions are considered to be the most important decisions made by a firm's management?

Question 2) Briefly explain why capital budgeting projects are evaluated on the basis of incremental cash flows?

Question 3) Calculate the payback period for each project.

Question 4) Calculate the net present value (NPV) of each project, assuming that the firm has a cost of capital equal to 13%.

Question 5) Calculate the internal rate of return (IRR) for each project.

Question 6) Summarize the preferences dictated by each measure, and indicate which project you would recommend. Explain why.

Reference no: EM132588371

Questions Cloud

Interview with a healthcare professional : Discussion of Three Critical Aspects of Employee's responsibilities - interviewing specific employees on their specific responsibilities and the specific
Make the fraction class into a template : Building on the Fraction class you did earlier in the semester, Make the Fraction class into a template so it can be instantiated using different data types
How much must each of four partners report income : How much must each of four partners report income on his income tax return? Prepare Statement of Partner's Equity for current year ended Dec 31, 2019?
About choosing between marriage and the single life : When Paul advises believers about choosing between marriage and single life, how much do you think his expectations that the parousia might be near affected
Solve the payback period for each project : Summarize the preferences dictated by each measure, and indicate which project you would recommend. Explain why.Calculate the payback period for each project.
Explain how you would approach your employee : Describe how you would address this situation. Explain how you would approach your employee.
Describe the use of tshark as a wireless capture tool : Using Google find information on using Tshark to capture a wifi communication, then using the environment execute some of the Tshark commands using addresses.
Goals of network security are confidentiality-integrity : The book explains the three goals of network security are confidentiality, integrity, and availability.
Demonstrate a connection to your desired work environment : Demonstrate a connection to your current work environment. If you are not employed, demonstrate a connection to your desired work environment.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Given items as either revenue or capital expenditure

Classify the given items as either revenue or capital expenditure:- An extension to an office building costing £24,000.

  Explain the posting process and importance of journal page

Explain the posting process, including the importance of the journal page number and the account numbers. The process of transferring

  Given this stock ownership will whitemop corporation

Given this stock ownership, will Whitemop Corporation be treated as a personal holding company (i.e., do 5 or fewer persons own more than 50% of the stock)?

  Calculate amount of sales revenue needed to achieve target

A seller of guitars wants to make a monthly profit of $5,100 selling his guitars. His instruments sell for $700.00 each. His fixed costs are monthly rent and utilities/$1,210., $2,500./Wages and benefits to his employee, and other expenses of $481.00..

  Calculate the missing values in xyzs balance sheet

Calculate the missing values in XYZ's balance sheet and calculate net income for the year - Prepare the cash flow statement for the year using the indirect method.

  Compute what is the net income

A firm has sales of $800, total assets of $500, and a debt/equity ratio of 1.5. If its return on equity is 18%, what is its net income?

  Trade discounts can accounted under the gross and net metod

Accounts Receivables includes customer or noncustomer transactions with interest component. Trade Discounts can be accounted under the gross and net method: Land could include additional land improvements that have an indefinite life. Cost of buildin..

  What amount will be in the sinking fund at the end

Ekman Company issued $1,200,000, 12-year bonds and agreed to make annual sinking fund deposits of $74,600. The deposits are made at the end of each year into an account paying 4% annual interest. What amount will be in the sinking fund at the end of ..

  Explain the accruals and depreciations adjustments stating

Explain the Accruals and depreciations, Prepayments adjustments stating why they are needed and the double entry of each with examples.

  Sales invoice is a type of source document

All of the following statements regarding a sales invoice are true except: A sales invoice is a type of source document. A sales invoice is used by sellers to record the sale and for control. A sales invoice is used by buyers to record purchases and ..

  Fixed selling-administrative expenses are allocated equally

Following are the operating results of the two segments of Parklin Corporation: Segment A Segment B Total Sales $10,000 $15,000 $25,000 Variable costs of goods sold 4,000 8,500 12,500 Fixed costs of goods sold 1,500 2,500 4,000 Gross margin 4,500 4,0..

  Partial income statement account balances

The following are partial income statement account balances taken from the December 31, 2016, year-end trial balance of White and Sons, Inc.: restructuring costs, $450,000; interest revenue, $55,000; before-tax loss on discontinued operations, $550,0..

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