internal rate of return decision rule, Financial Management

Assignment Help:

Towson Enterprises has recognized two mutually exclusive (can’t do both) projects.  The relevant cash flows and timing of those cash flows are shown in the following table.  Suppose that the cash flows in years 1 through 4 all are received at the finish of the year.

 

Year

Project A

Project B

At Start

$ (50,000)

$ (50,000)

1

26,000

12,000

2

20,000

16,000

3

16,000

20,000

4

12,000

26,000

( a )        What is the approximate internal rate of return for every of the two projects?  If you apply the internal rate of return decision rule, which project should Towson accept?

 (b)         If the needed rate of return is 9%, what is the net present value for every  of the two projects?  Which project would Towson select if it applies the net present value decision rule

 


Related Discussions:- internal rate of return decision rule

Does high operating leverage always mean high business risk, Does high oper...

Does high operating leverage always mean high business risk?  Explain. High operating leverage doesn't always mean high business risk.  If the company's sales are quite steady

Explain capital in a money market or capital market, Question 1: (a) Ad...

Question 1: (a) Advise a risk averse individual whether to invest his capital in a money market or capital market. Justify your answer. (b) Explain five types of Money marke

Example of relationship between bond price and time, Illustration    ...

Illustration      Discount bond (5 yr. bond with 10% coupon) (expected rate yield at 12%) Premium bo

Calculation of a firms sales returns, a) The combined two-firm concentratio...

a) The combined two-firm concentration ratio of Motorola (approximately 17.5%) and Nokia (35%) is around 52.5% of the market. b) Up to 2 marks for correct definition: Market sha

Accounting period - accounting principle, Accounting Period - Accounting Pr...

Accounting Period - Accounting Principle Accounting period refers to span of time at the end of that and for which the financial statement are prepared to throw light on the r

International bonds, International bonds are divided into two c...

International bonds are divided into two categories namely, foreign bonds and euro bonds. Foreign bonds are issued by a borrowing company in another

Evaluate the revenue and cost, a) TFC = $1,840 (Rent, Salaries, Admin + Pow...

a) TFC = $1,840 (Rent, Salaries, Admin + Power) (b) BEQ = $1,840 / $16 = 115 child places (c) Graph: Title; Axis labels; TR line; TC line and TFC line accurately drawn and la

Mergers and acquisitions, Mergers and Acquisitions It is a Process of b...

Mergers and Acquisitions It is a Process of business combination. There are 3 forms of business combination: 1. M1.    M1 has the highest liquidity. This is the narrowest t

Write Your Message!

Captcha
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