Use the npv decision rule to evaluate projects

Assignment Help Financial Management

Reference no: EM131549630

Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below. The required rate of return on projects of both of their risk class is 8 percent, and that the maximum allowable payback and discounted payback statistic for the projects are 2 and 3 years, respectively. Time: 0 1 2 3 Project A Cash Flow -25,000 15,000 35,000 6,000 Project B Cash Flow -35,000 15,000 25,000 55,000 Use the NPV decision rule to evaluate these projects; which one(s) should be accepted or rejected?

Reference no: EM131549630

Questions Cloud

What is the mean and the standard deviation : In the following probability model, X represents the number of activities a parent of a 6th-to-8th grade student is involved in.

Write a paper focusing on immediate and continuing response : Choose one of the two natural disasters and write a research paper focusing on the following: The immediate and continuing response of the public health sector.

Application assignment-forces of change : In today's contemporary economic environment, change is a reality. All firms and organizations experience change.

What disasters may strike your community and why : Formulate responses to the disaster, considering systems and community levels of intervention.What disasters may strike your community and why?

Use the npv decision rule to evaluate projects : Use the NPV decision rule to evaluate these projects; which one(s) should be accepted or rejected?

Approximate the probability - operation of a superconductor : A zircon semiconductor is critical to the operation of a superconductor and must be replaced immediately upon failure. Its expected lifetime is 100 hrs.

Process of making a decision : The process of making a decision through new task with customers that walks through their doors

Ethical considerations-npv and irr with mitigation : Capital budgeting criteria: ethical considerations A mining company is considering a new project. Calculate the NPV and IRR with mitigation

What is the payment for the first five years : What is the payment for the first 5 years? At the end of 5 years, how much have you paid towards the principal? How much is left?

User Account

All Pages