Question
In: Finance
Jon is considering three independent projects (F, G, and H) for investment with financial information shown...
- Jon is considering three independent projects (F, G, and H) for investment with financial information shown in the following table. Use present worth analysis to determine which projects he should choose, if any, if his MARR is 7% and he has no budget limit. MAKE SURE TO SHOW CONVERSION FACTOR NOTATIONS AS WELL!
|
Project |
Initial investment ($) |
Annual Net Cash Flow ($) |
Life (years) |
|
F |
-7,000 |
1,000 |
8 |
|
G |
-6,000 |
1,500 |
6 |
|
H |
-8,000 |
2,500 |
4 |
Solutions
jeff jeffy answered 1 year agoRelated Solutions
QUESTION 14 A company is considering three independent projects (G, H, and I) that have the...
QUESTION 14 A company is considering three independent projects
(G, H, and I) that have the following expected cash flows and
risk-adjusted discount rates. Project Discount Rate (k) Initial
Investment Year 1 Year 2 Year 3 Year 4 Year 5 G 9.0% ($800) $200
$200 $200 $200 $250 H 5.0% ($500) $300 $50 $50 $50 $200 I 7.0%
($400) $90 $120 $150 $100 $50 The company has a budget constraint
of $1,000. Based on NPV, which project(s) should the company...
A company is considering three projects (G, H, and I) that have the following expected cash...
A company is considering three projects (G, H, and I)
that have the following expected cash flows and risk-adjusted
discount rates.
Project
Discount Rate (k)
Initial Investment
Year 1
Year 2
Year 3
Year 4
Year 5
G
9.0%
($800)
$200
$200
$200
$200
$250
H
5.0%
($500)
$300
$50
$50
$50
$200
I
7.0%
($400)
$90
$120
$150
$100
$50
The company wants to rank the projects based on PI.
Which project has the highest PI?
Project G
Project...
Walsh Company is considering three independent projects, each of which requires a $6 million investment. The...
Walsh Company is considering three independent projects, each of
which requires a $6 million investment. The estimated internal rate
of return (IRR) and cost of capital for these projects are
presented below:
Project H (High risk):
Cost of capital = 16%
IRR = 21%
Project M (Medium risk):
Cost of capital = 14%
IRR = 11%
Project L (Low risk):
Cost of capital = 7%
IRR = 9%
Note that the projects' costs of capital vary because the
projects have...
Lane Industries is considering three independent projects, each of which requires a $2.5 million investment. The...
Lane Industries is considering three independent projects, each
of which requires a $2.5 million investment. The estimated internal
rate of return (IRR) and cost of capital for these projects are
presented here:
Project H (high risk):
Cost of capital = 15%
IRR = 17%
Project M (medium risk):
Cost of capital = 10%
IRR = 8%
Project L (low risk):
Cost of capital = 7%
IRR = 8%
Note that the projects' costs of capital vary because the
projects have...
Lane Industries is considering three independent projects, each of which requires a $2.5 million investment. The...
Lane Industries is considering three independent projects, each
of which requires a $2.5 million investment. The estimated internal
rate of return (IRR) and cost of capital for these projects are
presented here:
Project H (high risk):
Cost of capital = 13%
IRR = 15%
Project M (medium risk):
Cost of capital = 10%
IRR = 8%
Project L (low risk):
Cost of capital = 8%
IRR = 9%
Note that the projects' costs of capital vary because the
projects have...
Lane Industries is considering three independent projects, each of which requires a $2.5 million investment. The...
Lane Industries is considering three independent projects, each
of which requires a $2.5 million investment. The estimated internal
rate of return (IRR) and cost of capital for these projects are
presented here:
Project H (high risk):
Cost of capital = 13%
IRR = 15%
Project M (medium risk):
Cost of capital = 10%
IRR = 8%
Project L (low risk):
Cost of capital = 8%
IRR = 9%
Note that the projects' costs of capital vary because the
projects have...
If f and g are both differentiable functions. If h = f g, then h'(2) is: ___________________
If f and g are both differentiable functions. If h = f g, then h'(2) is: ___________________
Given the function: y=sin(4x)+e^-3x and dx/dt = 3 when x=0. Then dy/dt = ________________ when x=0.
Let f(x) = ln (√x). The value of c in the interval (1,e) for which f(x) satisfies the Mean Value Theorem (i.e f'(c)= f(e)-f(1) / e-1 ) is: _________________________
Suppose f(x) is a piecewise function: f(x) = 3x^2 -11x-4, if x ≤ 4 and f(x) =...
Your company is considering three independent projects. Given the following cash flow information, calculate the payback...
Your company is considering three independent projects. Given
the following cash flow information, calculate the payback period
for each. If your company requires a three-year payback before an
investment can be accepted, which project(s) would be accepted?
Project D Project E Project F
Cost 205,000.00 179,000.00 110,000.00
Inflow year 1 53,000.00 51,000.00 25,000.00
Inflow year 2 50,000.00 87,000.00 55,000.00
Inflow year 3 48,000.00 41,000.00 21,000.00
Inflow year 4 30,000.00 52,000.00 9,000.00
Inflow year 5 24,000.00 40,000.00 35,000.00
Payback Period EXACT...
Your firm has identified three potential investment projects. The projects and their cash flows are shown...
Your firm has identified three potential investment projects.
The projects and their cash flows are shown here: (
Project
Cash Flow Today
(millions)
Cash Flow in One Year
(millions)
A
−$6
$17
B
$3
$6
C
$16
−$5
Suppose all cash flows are certain and the risk-free interest
rate is 7%.
a. What is the NPV of each project?
b. If the firm can choose only one of these projects, which
should it choose?
c. If the firm can choose...
Your firm has identified three potential investment projects. The projects and their cash flows are shown...
Your firm has identified three potential investment projects.
The projects and their cash flows are shown here:
Project
Cash Flow Today
(millions)
Cash Flow in One Year
(millions)
A
−$7
$17
B
$6
$6
C
$15
−$14
Suppose all cash flows are certain and the risk-free interest
rate is
7%.
a. What is the NPV of each project?
b. If the firm can choose only one of these projects, which
should it choose?
c. If the firm can choose any...
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