Reference no: EM131018159
Capital Investment Evaluation
Select one of the capital investment evaluation methods described in Chapter 10 of your text. Fully explain the capital evaluation method's strengths and weaknesses. Take a position and defend the use of your selected method. Be sure to use at least two scholarly sources to support your position. Your initial post should be 200-250 words.
Pick one of the below methods:
The Evaluation Method
Net Present Value Method
Internal Rate of Return
The Payback Period Method
Accounting Rate of Return Method
Discussion 2
Ranking Investment Alternatives
(Problem 10-41) Grosvenor Industries has designated $1.2 million for capital investment expenditures during the upcoming year. Its cost of capital is 14 percent. Any unused funds will earn the cost of capital rate. The following investment opportunities along with their required investment and estimated net present values have been identified:
Project Net Investment NPV Project Net Investment NPV
A $200,000 $22,000 F $250,000.00 $30,000.00
B $275,000 $21,000 G $100,000.00 $7,000.00
C $150,000 $6,000 H $200,000.00 $18,000.00
D $190,000 -$19,000 I $210,000.00 $4,000.00
E $500,000 $40,000 J $250,000.00 $35,000.00
In your response, complete the following:
Rank the projects using the profitability index.
Considering the limit on funds available, which projects should be accepted?
Using the NPV, which projects should be accepted, considering the limit on funds available?
If the available investment funds are reduced to only $1,000,000:
Does the list of accepted projects change from Part 2?
What is the opportunity cost of the eliminated $200,000?
|
What types of industries have unearned revenue
: Why do companies issue bonds? Would you rather buy a bond at a discount or a premium rate? Why? What is the determining factor of whether a bond is sold at a discount, face value, or premium.
|
|
Calculate the price and quantity consumed in domestic carp
: Calculate the price and quantity consumed in the domestic carp market. Would Monona import or export carp and how many units are imported or exported? What is the total surplus in the economy? Would the domestic producers favor opening the carp ma..
|
|
Estimate the cost of projects and maintaining team cohesion
: The comparisons should be based on the effectiveness of each approach for planning the allocation of people to projects, estimating the cost of projects, maintaining team cohesion, and managing changes in project team membership.
|
|
Explore the impacts of recession on small businesses
: Explore the impacts of recession on small businesses - formulate a framework to explore these impacts on a wider scale to provide strategic guidelines that will help build the resilience of small businesses during the periods of recession.
|
|
What is the opportunity cost of the eliminated $200,000
: Using the NPV, which projects should be accepted, considering the limit on funds available?
|
|
Compare two work or art bodhisattva padmapani vs chatar muni
: Compare these two works or Art: Bodhisattva Padmapani - vs - Basawan and Chatar Muni, Akbar and the Elephant Hawai.
|
|
Explain the qualitative characteristics of financial reports
: Discuss whether you believe the present conceptual framework has delivered advantages.
|
|
Describe the particular elements of the selected work
: Formal Anaylsis, describe the particular elements of selected work and explain how they function to communicate a particular meaning, convey a cultural message or theme, or express a specific emotion, feeling, or attitude.
|
|
What is considered part of the estate
: There are surprised, and a little confused, when you mention that their heirs might end up receiving only a fraction of those assets after the two of them pass away.
|