Question
In: Finance
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
- Calculate the NPV, for each project
- Calculate the MIRR for each project
- Indicate the correct accept-reject decision for each.
Solutions
jeff jeffy answered 2 years agoRelated Solutions
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....
A company has two projects: Beta and Gamma. Project Beta Project Beta is an investment in...
A company has two projects:
Beta and Gamma.
Project Beta Project Beta is an
investment in machinery. Initial investment paid was £20,000 at
the
start of the project and it has been
estimated there will be nil scrap value at the end. Cost of
capital has been estimated as 25%.
Year
Cash inflows (£)
1
4,000
2
8,000
3
14,000
4
20,000
5
18,000
Project Gamma
Project Gamma is another investment in
machinery. It has the following information:
Yearly cash...
CAPITAL BUDGETING CRITERIA A firm with a 13% WACC is evaluating two projects for this year's...
CAPITAL BUDGETING CRITERIA
A firm with a 13% WACC is evaluating two projects for this
year's capital budget. After-tax cash flows, including
depreciation, are as follows:
0
1
2
3
4
5
Project M
-$6,000
$2,000
$2,000
$2,000
$2,000
$2,000
Project N
-$18,000
$5,600
$5,600
$5,600
$5,600
$5,600
Calculate NPV for each project. Round your answers to the
nearest cent. Do not round your intermediate calculations.
Project M $
Project N $
Calculate IRR for each project. Round your answers to two...
CAPITAL BUDGETING CRITERIA A firm with a 14% WACC is evaluating two projects for this year's...
CAPITAL BUDGETING CRITERIA A firm with a 14% WACC is evaluating
two projects for this year's capital budget. After-tax cash flows,
including depreciation, are as follows:
0 1 2 3 4 5
Project M -$12,000 $4,000 $4,000 $4,000 $4,000 $4,000
Project N -$36,000 $11,200 $11,200 $11,200 $11,200 $11,200
Calculate NPV for each project. Round your answers to the
nearest cent. Do not round your intermediate calculations. Project
M $ Project N $ Calculate IRR for each project. Round your answers...
eBook A firm with a 13% WACC is evaluating two projects for this year's capital budget....
eBook
A firm with a 13% WACC is evaluating two projects for this
year's capital budget. After-tax cash flows, including
depreciation, are as follows:
0
1
2
3
4
5
Project M
-$3,000
$1,000
$1,000
$1,000
$1,000
$1,000
Project N
-$9,000
$2,800
$2,800
$2,800
$2,800
$2,800
Calculate NPV for each project. Do not round intermediate
calculations. Round your answers to the nearest cent.
Project M: $
Project N: $
Calculate IRR for each project. Do not round intermediate
calculations. Round your answers...
eBook A firm with a 14% WACC is evaluating two projects for this year's capital budget....
eBook
A firm with a 14% WACC is evaluating two projects for this
year's capital budget. After-tax cash flows, including
depreciation, are as follows:
0
1
2
3
4
5
Project M
-$21,000
$7,000
$7,000
$7,000
$7,000
$7,000
Project N
-$63,000
$19,600
$19,600
$19,600
$19,600
$19,600
Calculate NPV for each project. Do not round intermediate
calculations. Round your answers to the nearest cent.
Project M: $
Project N: $
Calculate IRR for each project. Do not round intermediate
calculations. Round your answers...
CAPITAL BUDGETING CRITERIA A firm with a 13% WACC is evaluating two projects for this year's...
CAPITAL BUDGETING CRITERIA
A firm with a 13% WACC is evaluating two projects for this
year's capital budget. After-tax cash flows, including
depreciation, are as follows:
0
1
2
3
4
5
Project M
-$3,000
$1,000
$1,000
$1,000
$1,000
$1,000
Project N
-$9,000
$2,800
$2,800
$2,800
$2,800
$2,800
Calculate NPV for each project. Round your answers to the
nearest cent. Do not round your intermediate calculations.
Project M $
Project N $
Calculate IRR for each project. Round your answers to two...
CAPITAL BUDGETING CRITERIA A firm with a 13% WACC is evaluating two projects for this year's...
CAPITAL BUDGETING CRITERIA
A firm with a 13% WACC is evaluating two projects for this
year's capital budget. After-tax cash flows, including
depreciation, are as follows:
0
1
2
3
4
5
Project M
-$12,000
$4,000
$4,000
$4,000
$4,000
$4,000
Project N
-$36,000
$11,200
$11,200
$11,200
$11,200
$11,200
Calculate NPV for each project. Round your answers to the
nearest cent. Do not round your intermediate calculations.
Project M $
Project N $
Calculate IRR for each project. Round your answers to two...
Capital budgeting criteria A firm with a 13% WACC is evaluating two projects for this year's...
Capital budgeting criteria A firm with a 13% WACC is evaluating
two projects for this year's capital budget. After-tax cash flows,
including depreciation, are as follows: 0 1 2 3 4 5 Project M
-$15,000 $5,000 $5,000 $5,000 $5,000 $5,000 Project N -$45,000
$14,000 $14,000 $14,000 $14,000 $14,000 Calculate NPV for each
project. Round your answers to the nearest cent. Do not round your
intermediate calculations. Project M $ Project N $ Calculate IRR
for each project. Round your answers...
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