Propose which investment plan, Financial Management

Assignment Help:

Problem

There are two investment plans in the market whose details are given below based on which you need to decide which investment plan you need to select. Propose which investment plan you prefer and why?

Particulars

Part A

Part B

Investment in Rs. Million

3

2.7

Savings/ gain per year in Rs. Million

1.0

0.75

No. of years savings or gain would occur

5

5

Discount Rate

12%

12%

>>Plan A is a better investment plan because NPV of plan A is 0.6048 which is more than plan B which is equal to 0.0036
Formula: PV= S[1-(1+i)-5
                     -------------
                            I
And NPV= PV - i

Elaborate

  • Plan A is better investment
  • Calculations and above correct answer

Related Discussions:- Propose which investment plan

Advantage of weighted average cost of capital, Advantage of Weighted Averag...

Advantage of Weighted Average Cost of capital 1) Straight Forward and logical: Weighted Average ost of Capital defines the oveall cost of capital as the sum of the cost of t

Determine the objectives of the firm, Determine the Objectives of the Firm ...

Determine the Objectives of the Firm Objectives of the Firm - Profit Maximisation and Wealth Maximisation To put it simply, we may say that goal of any business is to max

Calculate the wacc and irr, The capital structure of Wild West Inc. is as f...

The capital structure of Wild West Inc. is as follows: Debts: $5,000,000 (face value) bonds with coupon rate at 8.00% and current price at par Preferred shares: $2,000,000

Operating cycle, application of the operating cycle to a vegetable company

application of the operating cycle to a vegetable company

Describe duties of the financial manager in a business firm, Describe the d...

Describe the duties of the financial manager in a business firm? Financial managers evaluate the firm's performance, determine what are the financial consequence will be if the

Valuing a bond between coupon payments, Most of the time, an in...

Most of the time, an investor buys a bond between coupon payments. In such transaction, the buyer must compensate the seller of the bond for the

What are the aspects of receivables management, Q. What are the Aspects of ...

Q. What are the Aspects of Receivables Management? Scope or else Aspects or Receivables Management: - Extent of receivables management is quite wide. It comprises the following

Fm, challenges that the finance manager face in fulfilling the managerial f...

challenges that the finance manager face in fulfilling the managerial function

Prepare a report for the managing director, The Managing Director of your f...

The Managing Director of your firm is thinking aloud about an appropriate gearing level for the company: "The consultants I spoke to yesterday explained that some theorists adva

Method to assess the neurological status, Method to Assess the Neurological...

Method to Assess the Neurological Status: World Health Organization (WHO) define Stroke as interruption of the blood supply to the brain, the effects of a stroke depend on whi

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