Solution-Which method you think is the best to find out

Which method you think is the best to find out

Assignment Help Finance Basics

Reference no: EM132531999

"Please don't do it in Excel or Spread sheet. Give me the full explanation for my understanding."

Projects X and Y have the following expected net cash flows:

Project X Project Y

Year Cash Flow Cash Flow

0 -$500,000 -$500,000

1 250,000 350,000

2 250,000 350,000

3 250,000 300,000

4 200,000 200,000

5 150,000

Both the projects are of the same company, Deccan Pharma. The most recently paid dividend was $2 and it is growing at 5% for the infinite period of time. Moreover, the stock is selling for $45.
Assume you are a finance manager of the company. Which project you should Choose based on NPV? Would your decision change if payback method was used? Or Discounted Payback period?
Which method you think is the best to find out the solution and why? Why you are not choosing the other two methods?

Reference no: EM132531999

Questions Cloud

Respective coefficients of variation : Given the following information, calculate the expected value for Firm C's EPS. Data for Firms A and B are as follows: E(EPSA) = $5.10

Analyze use and communication of a diagnosis : Analyze use and communication of a diagnosis in a case study. Analyze strengths and limitations of the DSM-5 diagnostic system

What is the direct labor efficiency variance : The entity sets the benchmark at 2 direct labor hours per product at a standard rate of P100 per direct labor hour. What is the direct labor efficiency variance

Compare and contrast rational choice theory and trait theory : Compare and contrast rational choice theory and trait theory, discuss both theories in detail. Was it acceptable at that time? use historical example

Which method you think is the best to find out : "Please don't do it in Excel or Spread sheet. Give me the full explanation for my understanding."

What role has class and gender played in the lives : What role has class, race, and gender played in their lives? How do you see these stratifiers as playing a role, even if the interviewee is unaware

Calculate the fair rate for project a : 1. For the information asymmetry case, show calculations to determine the selling price and which cars remain in the market. Description Peaches

What is the initial measurement of noncontrolling interest : An asset of Entity B is overvalued by P60,000 while one of its liability is undervalued by P40,000. What is the initial measurement of noncontrolling interest

Calculate the fair rate for project a : 1. For the information asymmetry case, show calculations to determine the selling price and which cars remain in the market. Description Peaches. peaches Lemons

User Account

All Pages

Which method you think is the best to find out

Reference no: EM132531999

Reference no: EM132531999

Questions Cloud

Reviews

Write a Review

Finance Basics Questions & Answers

Financial reporting and analysis

A report on financial accounting

Describe the types of financial ratios

Differences between sole proprietorship and corporation

Prepare a cash budget statement

What are the implied interest rates

State pricing theory and no-arbitrage pricing theory

Small business administration

Effect of financial leverage

Evaluate the basis for the payment to the lender

Importance of opps, ipps, mpfs and dmepos

Time value of money

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT