Which project would you recommend and why

Assignment Help Financial Management

Reference no: EM131959717

The Jasper County Waste Water Board has asked for your assistance in the following problem. They are considering two new methane digesters and need your input on which machine they should select.

Project TEX is a similar to a machine they have used in the past that is manufactured in Texas. Since they are so familiar with the technology they consider this method to have little to no risk.

Project NZ is a new technology from New Zealand. Due to some uncertainty with the adaptability of this process that was originally developed for an agricultural application, the JCWWB has asked you to use a risk adjusted technique.

You have decided to use the RADR technique and will increase/decrease the discount 3 percent for projects with other than average risk. The county uses a 10% cost for average risk projects.

Also, the Texas project will last 4 years and the NZ project has a life of only 3 years and the process is one that will need to be continued on in the future.

Assume inflation effects are neutral and can be ignored. Which project would you recommend and why? The cashflows are all beginning of year cashflows.

Proj TEX PROJ NZ

Yr 1 ($240,000) ($190,000)

Yr 2 ($140,000) ($170,000)

Yr 3 ($140,000) ($165,000)

Yr 4 ($140,000)

Reference no: EM131959717

Questions Cloud

Describe jeff bezos leadership style : Using any combination of the four leadership frames discussed this semester, compose a thoughtful critique of Amazon's "bruising" workplace atmosphere.

What other ratios could be examined to support the finding : Compared with industry, a company has a high current ratio and a low quick ratio. What is the most likely cause? What other ratios could be examined to support.

Potential applicants for the position of fireman : The City of Lakewood has a test that it uses to screen potential applicants for the position of Fireman. It consists of 50 yard dash

How you can develop a plan of action to motivate others : Describe how you can develop a plan of action to motivate others for cooperative problem solving, decision making, and evaluation.

Which project would you recommend and why : Assume inflation effects are neutral and can be ignored. Which project would you recommend and why? The cashflows are all beginning of year cashflows.

Discuss common metrics used to monitor the revenue cycle : Topic Essay - Write a five paragraph essay with the title: Revenue cycle. Discuss common metrics used to monitor the revenue cycle

Perform a comparison of the costs : A competing company is considering the same Option Y above. Option Y (The Crush Master Elite) would cost $15k initially, and $2.5k every year for routine.

Tell us a bit talent or skill : Describe a talent or skill that you have worked to develop in your life:

Issues with physical and mental disability discrimination : What are some issues with physical and mental disability discrimination within healthcare and what are some options to address these issues?

User Account

All Pages