What is The NPV of project plus the NPV of project

Assignment Help Financial Management
Reference no: EM131926973

Fairfax Pizza has a weighted-average cost of capital of 9.16 percent and is evaluating two projects: A and B. Project A has an initial investment of 4,388 dollars today and an expected cash flow of 7,503 dollars in 8 years. Project A is considered more risky than an average-risk project at Fairfax Pizza, such that the appropriate discount rate for it is 2.13 percentage points different than the discount rate used for an average-risk project at Fairfax Pizza. The internal rate of return for project A is 6.935 percent. Project B has an initial investment of 4,004 dollars today and an expected cash flow of 6,206 dollars in 3 years. Project B is considered less risky than an average-risk project at Fairfax Pizza, such that the appropriate discount rate for it is 1.42 percentage points different than the discount rate used for an average-risk project at Fairfax Pizza. The internal rate of return for project B is 15.728 percent. What is The NPV of project A plus the NPV of project B?

Reference no: EM131926973

Questions Cloud

Firm is considering investing in project with cash flows : Suppose your firm is considering investing in a project with the cash flows shown below, Use the NPV decision rule to evaluate this project.
How many months will he shorten the term of the loan : If the borrower pays an extra $100 with each payment starting in month 85, by how many months will he shorten the term of the loan?
Find the final amount in the account : which the rate of return on the account and regular contribution change over time. ?$1000 per quarter invested at 4.9%. Find the final amount in the account?
What would be annualized cos of the hydroelectric dam : What would be the annualized cos of the hydroelectric dam, if the life of the dam is expected to last indefinitely? Assume the marr is 10% per year.
What is The NPV of project plus the NPV of project : Fairfax Pizza has weighted-average cost of capital of 9.16 percent and is evaluating two projects. What is The NPV of project A plus the NPV of project B?
What are your worst-case and best-case NPVs for project : The engineering department’s net working capital estimate is accurate only to within ±5 percent. What are your worst-case and best-case NPVs for this project?
What is NPV-Oxygen Optimization would compute for project : What is the NPV that Oxygen Optimization would compute for project A?
Currently hold market index portfolio : If you currently hold a market index portfolio, what would be the alpha for Portfolios A and B?
The effect of taxes on various break-even measures : This problem concerns the effect of taxes on the various break-even measures.

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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