Question
In: Finance
A company compare between 4 projects. Use the following information to evaluate and select the adequate...
A company compare between 4 projects. Use the following information to evaluate and select the adequate project using:
- Net Present Value NPV.
- Profitability Index.
- Internal Rate of Return IRR
- Modified Internal Rate of Return MIRR
|
Projects |
P1 |
P2 |
P3 |
P4 |
|
Cost |
100000 |
150000 |
200000 |
250000 |
|
Cash in |
20000 |
25000 |
30000 |
80000 |
|
Life(years) |
7 |
9 |
10 |
7 |
Cost of capital 10%.
Solutions
jeff jeffy answered 1 year agoRelated Solutions
You are asked to evaluate the following two projects for the Norton corporation. Use a discount...
You are asked to evaluate the following two projects for the
Norton corporation. Use a discount rate of 14 percent. Use Appendix
B for an approximate answer but calculate your final answer using
the formula and financial calculator methods.
Project X (Videotapes
of the Weather Report)
($54,000 Investment)
Project Y (Slow-Motion
Replays of Commercials)
($74,000 Investment)
Year
Cash Flow
Year
Cash Flow
1
$
27,000
1
$
37,000
2
25,000
2
30,000
3
25,000
3
31,000
4
23,600
4
33,000...
You are asked to evaluate the following two projects for the Norton corporation. Use a discount...
You are asked to evaluate the following two projects for the
Norton corporation. Use a discount rate of 14 percent. Use Appendix
B for an approximate answer but calculate your final answer using
the formula and financial calculator methods. Project X (Videotapes
of the Weather Report) ($20,000 Investment) Project Y (Slow-Motion
Replays of Commercials) ($40,000 Investment) Year Cash Flow Year
Cash Flow 1 $ 10,000 1 $ 20,000 2 8,000 2 13,000 3 9,000 3 14,000 4
8,600 4 16,000...
You are asked to evaluate the following two projects for the Norton corporation. Use a discount...
You are asked to evaluate the following two projects for the
Norton corporation. Use a discount rate of 12 percent. Use Appendix
B for an approximate answer but calculate your final answer using
the formula and financial calculator methods.
Project X (Videotapes
of the Weather Report)
($48,000 Investment)
Project Y (Slow-Motion
Replays of Commercials)
($68,000 Investment)
Year
Cash Flow
Year
Cash Flow
1
$
24,000
1
$
34,000
2
22,000
2
27,000
3
23,000
3
28,000
4
22,600
4
30,000...
You are asked to evaluate the following two projects for the Norton corporation. Use a discount...
You are asked to evaluate the following two projects for the
Norton corporation. Use a discount rate of 11 percent. Use Appendix
B for an approximate answer but calculate your final answer using
the formula and financial calculator methods.
Project X (Videotapes
of the Weather Report)
($38,000 Investment)
Project Y (Slow-Motion
Replays of Commercials)
($58,000 Investment)
Year
Cash Flow
Year
Cash Flow
1
$
19,000
1
$
29,000
2
17,000
2
22,000
3
18,000
3
23,000
4
17,600
4
25,000...
You are asked to evaluate the following two projects for the Norton corporation. Use a discount...
You are asked to evaluate the following two projects for the
Norton corporation. Use a discount rate of 14 percent. Use Appendix
B for an approximate answer but calculate your final answer using
the formula and financial calculator methods.
Project X (Videotapes
of the Weather Report)
($46,000 Investment)
Project Y (Slow-Motion
Replays of Commercials)
($66,000 Investment)
Year
Cash Flow
Year
Cash Flow
1
$
23,000
1
$
33,000
2
21,000
2
26,000
3
22,000
3
27,000
4
21,600
4
29,000
A manager of “Safola Co. “ ask your advice to evaluate 4 projects, consider the following...
A manager of “Safola Co. “ ask your advice to evaluate 4
projects, consider the following information to determine the
project the manager should be select by the following
criteria’s:
Risk Adjusted Discount Rate RADR
Equivalent Certainty Factor CF
Projects
A
B
C
Cost
100000
150000
200000
Expected of cash inflows
20000
25000
30000
Life( years)
7
9
10
Level of risk ( c.v)
0.24
0.34
0.18
Safola Co. usually uses the following discount rates
10%, 7%, 12%, and certainty...
Evaluate the following projects using the payback method assuming a rule of 4 years for payback....
Evaluate the following projects using the payback method
assuming a rule of 4 years for payback.
Year Project A Project B
0. -10,000 -10,000
1. 4000 4000
2. 4000 3000
3. 4000 2000
4. 0. 1,000,000
A.
Project A can be accepted because the payback period is 2.5
years but Project B cannot be accepted because its payback period
is longer than 3 years.
B.
Project B should be accepted, since there is a $1,000,000 payoff
in the 4th year...
You are asked to evaluate the following two projects for Boring Corporation. Use a discount rate...
You are asked to evaluate the following two projects for Boring
Corporation. Use a discount rate of 12 percent. Use Appendix B.
Project X (DVDs
of the Weather Reports)
($16,000 Investment)
Project Y (Slow-Motion
Replays of Commercials)
($36,000 Investment)
Year
Cash Flow
Year
Cash Flow
1
$8,000
1
$18,000
2
6,000
2
11,000
3
7,000
3
12,000
4
6,600
4
14,000
a. Calculate the profitability index for
project X. (Round "PV Factor" to 3 decimal places. Round
the final...
You are asked to evaluate the following two projects for Boring Corporation. Use a discount rate...
You are asked to evaluate the following two projects for Boring
Corporation. Use a discount rate of 13 percent. Use Appendix B.
Project X (DVDs
of the Weather Reports)
($18,000 Investment)
Project Y (Slow-Motion
Replays of Commercials)
($38,000 Investment)
Year
Cash Flow
Year
Cash Flow
1
$9,000
1
$19,000
2
7,000
2
12,000
3
8,000
3
13,000
4
7,600
4
15,000
a. Calculate the profitability index for
project X. (Round "PV Factor" to 3 decimal places. Round
the final...
You are asked to evaluate the following two projects for Boring Corporation. Use a discount rate...
You are asked to evaluate the following two projects for Boring
Corporation. Use a discount rate of 12 percent. Use Appendix B.
Project X (DVDs
of the Weather Reports)
($36,000 Investment)
Project Y (Slow-Motion
Replays of Commercials)
($56,000 Investment)
Year
Cash Flow
Year
Cash Flow
1
$18,000
1
$28,000
2
16,000
2
21,000
3
17,000
3
22,000
4
16,600
4
24,000
a. Calculate the profitability index for
project X. (Round "PV Factor" to 3 decimal places. Round
the final...
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