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

Investment allowance, Investment allowance Until a few years ago, a compan...

Investment allowance Until a few years ago, a company could charge an amount equal to 25 per cent of the original value of an asset as investment allowance in the period in which

Means of escape - place of safety, Means of escape - place of safety: ...

Means of escape - place of safety: The means of escape in a building are often supplemented by a fire warning system that may or may not include automatic detection, depending

Systems Engineering, critically analyses the system design process of a pro...

critically analyses the system design process of a project for a light railway link for a city

Fire prevention – bays or zones, Fire prevention – bays or zones: To pr...

Fire prevention – bays or zones: To prevent the spread of a fire within an aircraft/engine nacelle, it is divided up into sections or zones, each being separated by a fireproof

Comparison of petrol engines and diesel engines, COMPARISON OF PETROL ENGIN...

COMPARISON OF PETROL ENGINES AND DIESEL ENGINES 1.      In petrol engine, a mixture of air and petrol is drawn into the cylinder and compressed, whereas in case of diesel eng

Aeroengines - compressible flow, All fluids are to some extent compressible...

All fluids are to some extent compressible but gases show significant changes in density if pressure and/or temperature is changed. Some gas flows can be treated as being incomp

Vibrating beam accelerometer, Vibrating beam accelerometer The electrod...

Vibrating beam accelerometer The electrodes are driven by a high frequency voltage (1 MHz). The displacement is measured using a phase detector from the change of capacitance b

Piezoelectric accelerometer, Piezoelectric Accelerometer Piezoelectric ...

Piezoelectric Accelerometer Piezoelectric accelerometers are widely used for vibration measurements due to their low cost and very wide frequency range for which the sensitivit

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