User Account

All Pages

What is the net present value of investment a

Assignment Help Finance Basics
Reference no: EM13860492

A firm has the following investment alternatives. Each one lasts a year.

Investment         A               B               C

Cash Inflow     $1,150        $560          $600

Cash Outflow  $1,000         $500          $500

The firm's cost of capital is 7%. A and B are mutually exclusive, and B and C are mutually exclusive.

A. What is the net present value of investment A?? Investment B?? Investment C?

B. What is the internal rate on investment A? Investment B? INvestment C?

C. Which investment(s) should the firm make? Why?

D. If the firm had unlimited sources of funds, which investment(s) should it make? Why?

E. If there were another alternative, investment D, with an internal rate of retrun of 6 percent, would that alter your answer to question (D)? Why?

F. If the firm's cost of capital rose to 10%, what effect would that have on an investment A's internal rate of return?

Reference no: EM13860492

Questions Cloud

Determine matrixs taxable income for the year : Prepare the journal entry on December 31, 2017 to record the carryback and carryforward decision and determine Matrixs taxable income for the year ended December 31, 2015.
Process of introducing nitro functional group : Nitration is the process of introducing a nitro functional group to a benzene ring. The reaction occurs through a mechanism known as electrophilic aromatic substitution.
Prepare cannon companys statement of cash flows : Prepare Cannon Company's statement of cash flows for the year ending December 31, 2015 using the indirect method and explain how the indirect statement of cash flows that you prepared would differ under IFRS rules
Addition of hydronium ions from acid deposition : Earlier you learned that carbonate, CO32-(aq), is a component of soil and can neutralize acid deposition. Given what you have learned about acid-base reactions and pH curves, sketch the pH curve for soil containing carbonate ions that underg..
What is the net present value of investment a : What is the net present value of investment A?? Investment B?? Investment C? What is the internal rate on investment A? Investment B? INvestment C? Which investment(s) should the firm make? Why?
A discussion of the business strategy of the u.s. : Summarize the basic situation in the case including a discussion of the business strategy of the U.S. firm you identified.
Explain why open-loop control is not recommendable : Design an open-loop controller such that the speed has a constant value of 0.5 rad/s. Show your result via simulation using Simulink. Explain why open-loop control is not recommendable in practice.
The listing agreement defines the relationship between : The primary function of the real estate brokerage industry is to
Question regarding the forensics review : 1) A V.O.C; a] paint thinner b] blood c] plasma d] a b c  2) The noble gases; a] have complete shells b] do not react c] very volatile d] b and c

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