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

Help please, Judy Johnson is choosing between investing in two Treasury sec...

Judy Johnson is choosing between investing in two Treasury securities that mature in five years and have par values of $1,000. One is a Treasury note paying an annual coupon of 5.

Caselet- 2, suggestion regarding credit limit. should it be approved or not...

suggestion regarding credit limit. should it be approved or not what should be the amount of

The pitch change mechanism , THE PITCH CHANGE MECHANISM : The cylinder...

THE PITCH CHANGE MECHANISM : The cylinder backplate . The disc shaped backplate provides a mounting for the pitch change cylinder. This backplate fits in front of the propel

Fire alarm systems, Fire alarm systems: All buildings require a means ...

Fire alarm systems: All buildings require a means by which the warning  of  fire  can  be  given  to  all occupants.  In the very smallest premises this might be achievable by

Aerodynamics, what is centrifugal twisting moment

what is centrifugal twisting moment

Metal cutting tool, how to design a circural form tool on drawing sheet?

how to design a circural form tool on drawing sheet?

Combustion section - aircraft engine, Combustion section: The combustio...

Combustion section: The combustion chamber has the difficult task of burning large quantities of fuel, supplied through the fuel burners, with extensive volumes of air, supplie

Avionic systems design- static stability derivatives, Static stability der...

Static stability derivatives Static stability requires that a restoring action to any motions caused by forces and moments is auto-matically produced along and about the same a

Developing the optics and imaging components of a mi, I have senior design ...

I have senior design this semester and my professor give my this project. could you help me

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