Question
In: Advanced Math
The software application development company for which you work is evaluating two different options for starting...
The software application development company for which you work is evaluating two different options for starting a new application development within the upcoming year. The company seeks to earn a return on each project that exceeds its cost of capital of 6.5 %. Further, the company assumes that given the current economic conditions, inflation may be expected to grow by 1% for the next year. Assume that the project takes place in Year 0 and begins earning cash flows on its application product from years 1 through 5.
| Year 0 | Y1 | Y2 | Y3 | Y4 | Y5 | |
|---|---|---|---|---|---|---|
| Project A | (-$50,000.00) | $5,000.00 | $10,000.00 | $20,000.00 | $30,000.00 | $65,000.00 |
| Project B | (-$65,000.00) | $15,000.00 | $20,000.00 | $40,000.00 | $45,000.00 | $25,000.00 |
Answer the following questions based on the analysis of the given cash flows for Project A versus Project B:
What is the NPV for each proposed project?
Which project would you select based on the NPV?
Alter the discount rate based on the method presented in the videos in the Financial Analysis Tools section below so that you reach an NPV of "0" (or close to "0") thereby arriving at the project IRR. Which IRR is higher?
If inflation were not a factor, would your results change?
Solutions
Colby Messinger answered 1 year agoRelated Solutions
The software application development company for which you work is evaluating two different options for starting...
The software application development company for which you work
is evaluating two different options for starting a new application
development within the upcoming year. The company seeks to earn a
return on each project that exceeds its cost of capital of 6.5 %.
Further, the company assumes that given the current economic
conditions, inflation may be expected to grow by 1% for the next
year. Assume that the project takes place in Year 0 and begins
earning cash flows on...
You are evaluating two different manufacturing work cells to produce a specific product for your company....
You are evaluating two different manufacturing work cells to
produce a specific product for your company. You will make this
product for 6 years. Work Cell 1: This work cell costs $275,200 and
has a $21,000 salvage value at the end of six years. Annual
operating costs are $28,000 and annual profits generated are
$123,000. Work Cell 2: This work cell costs $226,300 and has no
salvage value at the end of six years. Annual operating costs are
$34,000 and...
Explain the importance of evaluating solutions, after development work on the software forming the solution has...
Explain the importance of evaluating solutions, after
development work on the software forming the solution has been
completed and the software has been implemented (put into
operation/use). Ensure you consider multiple perspectives in your
response – you are expected to identify at least 3 different
benefits from performing this evaluation.
Explain the importance of evaluating solutions, after development work on the software forming the solution ked...
Explain the importance of evaluating solutions, after
development work on the software forming the solution ked out of
has been completed and the software has been implemented (put into
operation/use). Ensure you consider multiple perspectives in your
response - you are expected to identify at least 3 different
benefits from performing this evaluation.
Explain the importance of evaluating solutions, after development work on the software forming the solution has...
Explain the importance of evaluating solutions, after
development work on the software forming the solution has been
completed and the software has been implemented (put into
operation/use).
Your software development company wants to continue developing and enhancing a software application for internal use....
Your software development company wants to continue developing
and enhancing a software application for internal use.
For this week's assignment, the application is required to read
from a file (data.txt) containing employee data. Your tasks
include:
Use the data file from Week One (data.txt)
Implement LINQ functionalities to search, display, and modify
employees' records
Meet specifications by displaying on a Windows Form
Application
Program Input File:
Using Visual Studio and C# programming concepts and using your
Week one data.txt file...
Q1 [5 marks] Explain the importance of evaluating solutions, after development work on the software forming...
Q1 [5 marks]
Explain the importance of evaluating solutions, after
development work on the software forming the solution has been
completed and the software has been implemented (put into
operation/use).
Ensure you consider multiple perspectives in your response – you
are expected to identify at least 3 different benefits from
performing this evaluation.
You have received the following three payment options for a software application you have developed to...
You have received the following three payment options for a
software application you have developed to sell:
Option 1
You will receive $1,000,000 now plus $200,000 from year 6
through 15. Also, if the software application did over $100 million
in cumulative sales by the end of year 15, you will receive an
additional $3,000,000. There is a 70 percent probability this would
happen.
Option 2
You will receive thirty percent of the buyer’s gross profit on
the product for...
You have received the following three payment options for a software application you have developed to...
You have received the following three payment options for a
software application you have developed to sell:
Option 1
You will receive $1,000,000 now plus $200,000 from year 6
through 15. Also, if the software application did over $100 million
in cumulative sales by the end of year 15, you will receive an
additional $3,000,000. There is a 70 percent probability this would
happen.
Option 2
You will receive thirty percent of the buyer’s gross profit on
the product for...
You have had an opportunity to use two application software packages to complete three different projects....
You have had an opportunity to use two application
software packages to complete three different projects.
Name the two application packages.
For each package, define its primary purpose and provide two
examples of how you would use the product in either a personal or a
business setting.
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