Write the npv for the chosen application

Assignment Help Finance Basics
Reference no: EM132379887

As the Manager of the pension fund, you are frequently targeted by software companies peddling investment simulation software. You have finally narrowed down your choice to two applications. You need to analyze the options by calculating NPV, IRR and Payback Period based on their purchase price and savings to your company over time. Your staff has prepared a cash -flow table to help you Year zero shows the purchase price of each application, and the figures listed for years 1-3 represent the savings to the company in successive years

Year Application I Application II

0 (today) (500,000.00) (800,000.00)

1 400,000.00 500,000.00

2 700,000.00 740,000.00

3 470,000.00 600,000.00

You are trying to decide which Application to use and will choose the Application that has a larger NPV. Calculate the NPV of both Applications if the required rate of return is 9.32 percent. Now as your answer, write the NPV for the chosen Application.

Reference no: EM132379887

Questions Cloud

What is the price of the stock today : The dividend paid by the firm will increase at a rate 2% every year. The dividends are discounted at a rate of 8.20% every year.
Journalize the closing entries : Prepare a complete worksheet. Prepare a classified balance sheet. Journalize the adjusting entries. Journalize the closing entries.
What is the best advice for isaac to give to jacob : He asks Isaac how making judgments in an audit team setting differs from running an audit oneself. What is the best advice for Isaac to give to Jacob?
What are your monthly payments : The interest rate charged is 0.51% monthly. What are your monthly payments?
Write the npv for the chosen application : Calculate the NPV of both Applications if the required rate of return is 9.32 percent.
Salvage value for the plant : No salvage value for the plant For a discount rate of 9%, what is the NPV?
Prospects of installing cost saving machinery : You are analyzing the prospects of installing cost saving machinery. You have the following information:
What will be the net increase in cash flows : What will be the net increase in cash flows per year from installing the machinery?
Prepare end of the month application general journal entry : Prepare the end of the month application General Journal entry (without explanation) of factory overhead for Job 2-1 for the month.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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