Npv, finance, Other Engineering

Assignment Help:
Problem 1
Suppose a company is considering two independent projects, Project A and Project B. The cash outlay for Project A is $14,000. The cash outlay for Project B is $20,000. The company’s cost of capital is 12%. The following table shows the after-tax cash flows. For each project, compute the NPV, the IRR, the MIRR, and indicate the accept/reject decision.
Year
Project A
Project B
1
$4800
$6700
2
$4800
$6700
3
$4800
$6700
4
$4800
$6700

























Problem 2
Suppose a company is considering two investment projects. Both projects require an upfront expenditure of $30 million. The company estimates that the cost of capital is 10% and that the investments will result in the following after-tax cash flows (in millions of dollars). Complete parts (a) through (e) below.

Year
Project A
Project B
1
$28
$10
2
$20
$15
3
$10
$20
4
$5
$25

Find the regular payback period for each project.
Find the discounted payback period for each project.
Assume that the two projects are independent and the cost of capital is 10%. Which project or projects should the company undertake? Base your results on the NPV.
Assume that the two projects are mutually exclusive and the cost of capital is 5%. Which project or projects should the company undertake? Base your results on the MIRR.
Explain why quantitative measures may not always be the best way to evaluate a project.

Related Discussions:- Npv, finance

Actuators , Actuators  The actuator consists of the control surfaces...

Actuators  The actuator consists of the control surfaces and associated servomechanisms, and is used to change the missile attitude and trajectory or flight path.

flow solver, Flow Solver The flow solver of FP utilises data produced ...

Flow Solver The flow solver of FP utilises data produced by the grid generator, together with data read from an input file named FLOW.DAT, and proceeds to calculate the solutio

Identify people at risk - fire risk assessment, Identify people at risk: ...

Identify people at risk: It is often easy to forget that there may be people in a building who cannot move as quickly as the rest of us.  They may be in a wheel chair, they ma

Thin-film ic, THIN-FILM IC: Unlike the monolithic IC's, which are forme...

THIN-FILM IC: Unlike the monolithic IC's, which are formed within a semiconductor material (substrate), the thin-film circuit is formed on the surface of an insulating substrat

CRO, different types of switches used in CRO

different types of switches used in CRO

Operation research, what is the difference between stepping stone method an...

what is the difference between stepping stone method and the MODI

Series of cash flows in economical engineering, Series of Cash Flows M...

Series of Cash Flows Most engineering economic analysis involve more than a single return occurring after the investment is made. In such cases, the present worth or the futur

Probabilistic analysis - fire risk assessment , Probabilistic analysis - Fi...

Probabilistic analysis - Fire risk assessment: Probabilistic analysis relies on data and data comes from experience.  The broader the experience, the larger the data source an

#title.project, what type of projects are take place in the chemical engin...

what type of projects are take place in the chemical engineering

Damage limits and repair in cold section inspection , Damage Limits and Rep...

Damage Limits and Repair Minor damage to compressor and fan blades may be repaired provided the damage is within the allowable limits established by the manufacturer in the AMM

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