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

Engineering economic analysis definition, Introduction Engineering Econ...

Introduction Engineering Economic Analysis Definition: using a combination of quantitative and qualitative techniques to analyze economic differences among engineering design a

Sources of engine noise - aircraft design, sources of engine noise To u...

sources of engine noise To understand the problem of engine noise suppression, it is necessary to have a working knowledge of the noise sources and their relative importance.

Flames obtained in an oxyacetylene gas welding process, Q.  Describe the t...

Q.  Describe the types of flames obtained in an oxyacetylene gas welding process giving the applications. There are three types of flames in the gas welding on the base of the

XOR: XNOR GATES, how to draw a circuit to determine the parity of a 4-bit b...

how to draw a circuit to determine the parity of a 4-bit binary number?

Case Let, This case has been framed in order to test the skills in evaluati...

This case has been framed in order to test the skills in evaluating a credit request and reaching a correct decision. Perluence International is large manufacturer of petroleum and

Risk Decomposition, Analyze two stocks from an industry of your choice in t...

Analyze two stocks from an industry of your choice in terms of risk decomposition, specifically portfolio variance eq. You should pick 2 firms that you have a certain degree of fam

Cash mangement, how to do a cash management project report ,including probl...

how to do a cash management project report ,including problems?example?

Physical chemistry, can you answer some problem from physical chemistry wit...

can you answer some problem from physical chemistry with a detailed approach why and how one should choose the steps in solving them.These are just random question that I have no c

Avionic systems design- primed stability derivatives, Primed stability der...

Primed stability derivatives The rolling and yawing motions are coupled through the cross inertia I XZ due to rotation not being about the principal axes. Since in general air

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