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In: Finance
DO NOT ANSWER IN EXCEL Mangement is considering two hotel projects. Project A will be in...
DO NOT ANSWER IN EXCEL
- Mangement is considering two hotel projects. Project A will be in Jamaica with an intial investment of $865,000 and Project B will be in Canada with an initial investment of $750,000
|
Years |
Project A |
Project B |
|
Year 1 CashFlow |
316,000.00 |
200,000.00 |
|
Year 2 CashFlow |
350,000.00 |
200,000.00 |
|
Year 3 CashFlow |
(20,000.00) |
(15,000.00) |
|
Year 4 CashFlow |
280,000.00 |
390,000.00 |
The cost of capital for Project A is 13% and the cost of capital
for project B is 15%.
Calculate the following;
- Calculate the discounted payback period of Project A
- Calculate the discounted payback period of Project B.
- Calculate the net present value for Project A
- Calculate the net present value for Project B.
- Management can only accept one project. Which project should management accept? Explain your answer
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Mangement is considering two hotel projects. Project A will be in Jamaica with an intial investment...
Mangement is considering two hotel projects. Project A will be
in Jamaica with an intial investment of $865,000 and Project B will
be in Canada with an initial investment of $750,000
Years
Project A
Project B
Year 1 CashFlow
316,000.00
200,000.00
Year 2 CashFlow
350,000.00
200,000.00
Year 3 CashFlow
(20,000.00)
(15,000.00)
Year 4 CashFlow
280,000.00
390,000.00
The cost of capital for Project A is 13% and the cost of capital
for...
Toby is considering two hotel projects. Project A will be in Jamaica with an initial investment...
Toby is considering two hotel projects. Project A will be in
Jamaica with an initial investment of $865,000 and Project B will
be in Canada with an initial investment of $750,000.
years
Project a
Project b
Yr1
316000
200000
Yr2
350000
200,000
Yr3
(20000)
(15000)
yr 4
280000
390000
The cost of capital for Project A is 13% and the cost of capital
for project B is 15%.
Calculate the following;
Calculate the discounted payback period of Project
A.
Calculate...
Please use Excel functions like PV A company is considering two capital budgeting projects. Each project...
Please use Excel functions like PV
A company is considering two capital
budgeting projects. Each project requires an initial outlay of
$4,000,000. Cash inflows for each project are given in the table
below. Each project has a life of 3 years. The company uses the NPV
method to evaluate capital budgeting projects and its required rate
of return is 9%. Here are the cash inflows from the projects.
Project
A Project
B
Year
1
$1,900,000
0
Year
2
$1,900,000 ...
The Financial Manager of Alantis Company is considering two projects (project A and project B), which...
The Financial Manager of Alantis Company is considering two
projects (project A and project B), which have cash flows as
follows:
Year
Cash Flow of Project A (in $)
Cash Flow of Project B (in $)
0
-100
-100
1
10
70
2
60
50
3
80
20
Alantis Company’s cost of capital is 10 percent.
Please Calculate the payback, NPV, IRR, and MIRR for both
projects. (Show step by step work)
The Financial Manager of Alantis Company is considering two projects (project A and project B), which...
The Financial Manager of Alantis Company is considering two
projects (project A and project B), which have cash flows as
follows:
Year
Cash Flow of Project A (in $)
Cash Flow of Project B (in $)
0
-100
-100
1
10
70
2
60
50
3
80
20
Alantis Company’s cost of capital is 10 percent.
Please Calculate the payback, NPV, IRR, and MIRR for both
projects. (Show step by step work)
There are two projects that the company is considering: Project A costs 10,000 to implement today,...
There are two projects that the company is considering:
Project A costs 10,000 to implement today, and it brings
subsequent cash flows of 5,900 at the end of year 1; 2,000 at the
end of year 2; 5,000 at the end of year 3.
Project B's initial cost is 7,500, and subsequent cash flows
are 5,000 per year for 3 years.
WACC is 8% for both projects.
Calculate NPV and IRR for each project, and decide which to
recommend.
There are two projects that the company is considering: Project A costs 10,000 to implement today,...
There are two projects that the company is considering:
Project A costs 10,000 to implement today, and it brings
subsequent cash flows of 5,000 at the end of year 1; 4,000 at the
end of year 2; 6,000 at the end of year 3.
Project B's initial cost is 12,000, and subsequent cash flows
are 6,000 per year for 3 years.
WACC is 8% for both projects.
a. Calculate NPV and IRR for each project, and decide which one
to...
Jack Engineering is considering two projects, Project Alpha and Project Beta system, in this year's capital...
Jack Engineering is considering two projects, Project Alpha and
Project Beta system, in this year's capital budget. The projects
are independent. The cash outlay for the Project Alpha is $44,860
and that for the Project Beta is $34,200. The firm's cost of
capital is 14%. After-tax cash flows, including depreciation, are
as follows:
Year
Project Alpha
Project Beta
1
15,000
10,200
2
15,000
10,200
3
15,000
10,200
4
15,000
10,200
5
15,000
10,200
Required:
Calculate the IRR for each project...
Jack Engineering is considering two projects, Project Alpha and Project Beta system, in this year's capital...
Jack Engineering is considering two projects, Project Alpha and
Project Beta system, in this year's capital budget. The projects
are independent. The cash outlay for the Project Alpha is $44,860
and that for the Project Beta is $34,200. The firm's cost of
capital is 14%. After-tax cash flows, including depreciation, are
as follows:
Year
Project Alpha
Project Beta
1
15,000
10,200
2
15,000
10,200
3
15,000
10,200
4
15,000
10,200
5
15,000
10,200
Required:
Calculate the IRR for each project....
(NPV, PI, and IRR calculations) You are considering two independent projects, project A and project B....
(NPV,
PI, and IRR
calculations)
You are considering two independent projects, project A and
project B. The initial cash outlay associated with project A is
$50,000
and the initial cash outlay associated with project B is
$70,000
The required rate of return on both projects is
9
percent. The expected annual free cash inflows from each project
are in the popup window:
Calculate the
NPV,
PI,
and IRR for each project and indicate if the project should be
accepted.
...
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