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

Energy bands, variation of energy bands with alloy composition

variation of energy bands with alloy composition

Tools, . An engineering department chair wants to maximize the use of scho...

. An engineering department chair wants to maximize the use of scholarship dollars to shape the enrollment of the incoming freshmen. All applicants take an engineering aptitude t

Elecrical communication, explain application of zener diode for meter prote...

explain application of zener diode for meter protection

Is the dividend paid on common stock taxable to shareholders, Is the divide...

Is the dividend paid on common stock taxable to shareholders? The results paid on common inventory are taxed on two stages in the U.S. First at the company stage, as a results c

Net working capital, Net working capital In computing net cash flows in th...

Net working capital In computing net cash flows in the above example, we have assumed that all revenues are received in cash and all expenses are paid in cash. In reality, the act

Thermodynamics of materials, outline five (5) areas where thermodynamics ca...

outline five (5) areas where thermodynamics can be applied in materials engineering

Bajaj electronics company, how would you judge the potential profits of Baj...

how would you judge the potential profits of Bajaj electronics on the first year of sales to booth plastics and give your views to increase the profit?

Assembly buildings - common fault, Assembly buildings - fire risk assessmen...

Assembly buildings - fire risk assessment: Common faults found in assembly buildings are: Combustible items left in protected routes or bedroom corridors Locked exi

Low pressure turbine clearance control valve - aircraft, Low pressure turbi...

Low pressure turbine clearance control valve: At take-off and low altitude the valve is in its normal closed position allowing cooling airflow to the core compartment. When an

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