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

Gravity die casting , Gravity Die Casting  In PERMANENT MOULD CASTING, ...

Gravity Die Casting  In PERMANENT MOULD CASTING, molten metal is poured under gravity into a metal mould where it remains until it solidifies. The mould is then opened and the

Cro, derive the expression of deflection of beam in CRO

derive the expression of deflection of beam in CRO

Statistical Quality control, Pls solve the problem 13-7 in Statistical Qual...

Pls solve the problem 13-7 in Statistical Quality control by Montgomery

Detection and removal of shadow from an image, plz give an exact method for...

plz give an exact method for the detection and removal of shadow from an image

Banking and finance, identify the role of the regulators and problems assoc...

identify the role of the regulators and problems associated with regulation

The brayton cycle-aeronautical engineering, The brayton cycle: The work...

The brayton cycle: The working cycle of the gas turbine engine is similar to that of the four-stroke piston engine.  There is induction, compression, ignition and exhaust in bo

..Evans Diagram, would you help with Evans diagram( draw and explain) for I...

would you help with Evans diagram( draw and explain) for Iron in seawater,and how variability of Oxygen concentration affect the electrode potential vs.current?

Flight dynamics - pitching moment, The centre of pressure (CP) is defined a...

The centre of pressure (CP) is defined as the point about which the resultant moment is zero; the net effect of the flow in terms of forces and moments would be the same as if the

Shelf list filing - library management, Shelf List Filing   Shelf list ...

Shelf List Filing   Shelf list reflects the arrangement of documents in the library. That is to say, the classificatory arrangement of the documents in a library can be seen th

Railway inspections - fire safety management, Railway Inspections - fire sa...

Railway Inspections - fire safety management: Railway premises can be anything from small open air stations to large underground complexes and the fire safety measures that ar

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