Whats the simple payback period

Assignment Help Other Subject
Reference no: EM13850189

One of the main uses of TVM concepts is to help a firms CFO and CEO decide what new investments to approve, vs. disapprove. This is referred to as capital budgeting. There are 3 commonly used methods to do capital budgeting; simple payback, net present value or NPV, and internal rate of return, or IRR.

Use all three methods for the following example; look at my "helpful memo on using Excel for TVM" to assist you:

A project is expected to generate a savings or profit improvement of $25,000/yr each for 4 years

The investment needed to generate this savings is $80,000

1. Whats the simple payback period?

2. Whats the projects NPV if the firms discount rate or cost of capital is 10%?

3. Whats the projects IRR For all three methods, completely ignore taxes?

Reference no: EM13850189

Questions Cloud

Why does the learning curve apply mainly : Why does the learning curve apply mainly to direct rather than indirect labor?
Long-range plan for mcdonald''s to implement : How should McDonald's respond when ads promoting healthy lifestyles featuring Ronald McDonald are equated with Joe Camel and cigarette ads? Should McDonald's eliminate Ronald McDonald in its ads? Based on your response to Question 4, recommend both..
Imagine you are president of volkswagen : Imagine you are president of Volkswagen in the 1960s or Toyota in the 1990s. Why weren't they satisfied with doing business in their own home markets? In what ways might US businesses in the new millennium be facing the same situations as Volkswagen ..
Calculate the initial deposit insurance assessment : What is the contribution to the asset base of the following items under the Basel requirements? Under the U.S. capital-to-assets rule - Calculate the initial deposit insurance assessment
Whats the simple payback period : Whats the simple payback period. Whats the projects NPV if the firms discount rate or cost of capital is 10%
Find an article or speak of an experience : Find an article or speak of an experience where Effectve Capacity was not being met and what you would do/did to reach effective capacity.
Discuss the implications of excessive working hours : discuss the implications of excessive working hours on the performance of employees and managers. Analyse ways in which employers could facilitate work-life balance during an economic downturn.
Describing your topic for marketing plan - selling tshirt : Please submit a brief proposal in 300 words describing your topic for your Marketing plan (selling tshirts) . I expect your paper to be well researched, clearly written, well organized and generally reflective of graduate level academic work
Consumption of pork over the relevant time period : The file , an Excel file on the ECON217 website, contains the data you need. Before beginning your analysis, you graph of the data, and decide that there is an increasing trend in the consumption of pork over the relevant time period. The model y..

Reviews

Write a Review

Other Subject Questions & Answers

  Personality disorders are different

Personality disorders are different from Axis I disorders in which way(s)? 1)they tend to persist for long periods of time, often lasting a lifetime. 2) They are difficult to treat. 3) Both a and b. 4) Neither a nor b.

  Summarize the book of lamentations

Summarize the book of Lamentations using, explaining, and identifying the genre of Prophecy. Identify the key theme, major events, and major personalities.

  Features in the cell phone to appeal to both markets

Talkaphone, Inc. discovered that teenagers preferred text messaging and that senior citizens preferred cell phones that could take pictures. They also discovered that it was too expensive to provide the highest quality of both these functions in a ce..

  Plagiarizing and online education

Define and explain the dual problems of grade inflation and academic integrity in online education; prepare in-text and reference methods for at least three sources.

  Technique to diffuse a team conflict situation

Identify some of the sources of conflict often experienced in teams. Select one of the sources and describe an exercise the team could utilize to overcome the conflict.

  Describe some of the pragmatic issues

Describe some of the pragmatic issues that researchers face when using the developmental designs and how these issues can threaten the validity of your results.

  A monopolistic firm faces based problems

What price should this monopoly charge to maximize its profit?

  Make a scatter diagram for the data using sales for the

a store wants to predict net profit as a function of sales for next year. historical data for 8 years is given in the

  Isolated as stereotypes

While the elderly are not as isolated as stereotypes would lead us to believe, there are differences between men and women. Women are especially likely to be isolated.

  Offset a lifetime of carbon emissions

Mature forests contain 200 metric tons of biomass per hectare. Assuming biomass is half carbon, what area would need to be set aside for new forest for each year of carbon emissions by the average Global Change student? What area would need to be set..

  Groups affect one another cooperatively

I need to find two specific formally organized groups that have a relationship. I then need to list each groups activities and how the two groups affect one another cooperatively.

  Electroencephalograph is recording alyssa''s brain activity

An electroencephalograph (EEG) is recording Alyssa's brain activity. She has just entered Stage 1 sleep when there is a sudden, loud crash in the sleep lab. It is likely that

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