Which projects should be undertaken

Reference no: EM13288754

Project Alpha requires an outlay of $10,000 immediately. Project Alpha has a 1-year life and is expected to produce a net cash flow at the end of one year of $20,000. Project Beta, a mutually exclusive alternative to Alpha, requires an outlay of $20,000 immediately. It, too, is expected to have a 1-year life and to produce a net cash flow at the end of one year of $35,000.

Compare the internal rate of return for both projects. Compute the NPV for both projects, using a cost of capital of 10 percent.

Which projects should be undertaken?

Reference no: EM13288754

Questions Cloud

What is the magnitude of the seals displacement : In diving to a depth of 983 m, an elephant seal also moves 693 m due east of his starting point. What is the magnitude of the seal's displacement

Find how much work was done by the gravitational force : Spiderman, whose mass is 70.0 kg, is dangling on the free end of a 12.6-m-long rope, the other end of which is fixed to a tree limb above. find How much work was done by the gravitational force on Spiderman in this maneuver

What will be the new stock price of plebane : Assuming that the market reacts rationally, what will be the new stock price of Plebane, Incorporated after the announcement?

How fast does the airplane move : An airplane moves at 120 m/sec to the west with respect to the air. How fast does the airplane move

Which projects should be undertaken : Compare the internal rate of return for both projects. Compute the NPV for both projects, using a cost of capital of 10 percent.

By how much did the companies retained earnings increase : Polycom Systems earned $480 million last year and paid out 20% of earnings in dividends.

What would be the value of one right : Prime Bankcorp has issued rights to its shareholders. The subscription price is $50 and five rights are needed along with the subscription price to buy one of the new shares. The stock is selling for $59 rights-on.

Define what is the partial pressure of nitrogen : The mole fraction of nitrogen in a air is 0.78. If the total barometric pressure is 760 torr, what is the partial pressure of nitrogen

How many shares or proxies are needed to elect : Under cumulative voting procedures, how many directors can the dissident stockholders elect with the proxies they now hold? How many directors could they elect under majority rule with these proxies?

User Account

All Pages