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 factors 0.633, 0.742, 0.543.

please Answer with full details .

Expert Solution

.	Projects	A	B	C
a	Cost	$ (100,000.00)	$ (150,000.00)	$ (200,000.00)
b	Expected Cash inflow	$ 20,000.00	$ 25,000.00	$ 30,000.00
c	Certainity factor	0.633	0.742	0.543
d	Riskless cash inflow (b x c)	$ 12,660.00	$ 18,550.00	$ 16,290.00
e	Dscount rate	10%	7%	12%
f	PV annuity factor	4.8684	6.5152	5.6502
g	PV of Cash flows (d x f)	$ 61,633.94	$ 120,856.96	$ 92,041.76
h	NPV (a - g)	$ (38,366.06)	$ (29,143.04)	$ (107,958.24)

ekkarill92 answered 1 year ago

You are ask to evaluate the following mutually exclusive projects, Project X which has an initial...

You are ask to evaluate the following mutually exclusive projects, Project X which has an initial cost of $5,060,000 and ten annual estimated net cash flows of $1,722,000 and Project Y which has an initial cost of $5,060,000 and five annual estimated cash flows of $2,079,000. Use two different standardized NPV methods to evaluate these projects at a cost of capital of 11 percent. (Please show all of your calculations). Discuss the logic of each of these methods. Are they...

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...

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%.

Consider the following three projects for Ralco Co. This company is in pharmaceutical industry. It currently...

Consider the following three projects for Ralco Co. This company is in pharmaceutical industry. It currently sells several drugs, including pain reliever and cough medicine. Project A is considered the safest project of these three, while Project C is the riskiest one. There are three discount rates for the capital budgeting; 10 percent for Project A, 13 percent for Project B, and 18 percent for Project C. Period Project A Project B Project C T=0 ($10,000) ($12,000) ($17,000) T=1 $1,000 $1,900 $1,900 T=2 $1,900 $1,900 $1,900 T=3 $1,900 $1,900 $1,900 T=4 $2,500 $1,900 $1,900 T=5 $2,500 $2,900 $1,900 T=6 $1,800 $2,900 $3,900 T=7 $1,800 $2,900 $3,900 T=8 $1,800 $3,900 $3,900...

Consider the following scenario: Your boss has come to you for advice on the current finances...

Consider the following scenario: Your boss has come to you for advice on the current finances of the company and needs you to create an extended DuPont analysis, common size analysis, and percentage change analysis. Your boss wants you to fill out the attached Excel file because he/she has no idea what she is talking about and is going to use your report as her work. Remember to answer all the questions in the attached document. Has J&W's liquidity position...

Evaluate the following projects described in the two problems below to determine if the projects are...

Evaluate the following projects described in the two problems below to determine if the projects are acceptable investments for the firms. Calculate NPV, IRR, MIRR, Traditional Payback (TPB) and Discounted Payback (DPB) and give your answer as acceptable or not acceptable according to each evaluation tool. 9-2. Zebra Fashions is evaluating a capital budgeting project that should generate $94,800 per year for four years. The initial cost is $245,000. a. If its required rate of return is 15%, should Zebra...

Question 4 identify the business factors and the related questions one would ask to evaluate an...

Question 4 identify the business factors and the related questions one would ask to evaluate an opportunity

5. You ask your recent MBA hire to evaluate the attractiveness of an investment in a...

5. You ask your recent MBA hire to evaluate the attractiveness of an investment in a piece of computer equipment you've been interested in. He gives you the following report. (Assume that he at least collected all the figures correctly.) The equipment cost $150,000 and will be straight-line depreciated over 5 years. It will replace an existing system -- that would otherwise be used for the five years -- which has been fully depreciated and could be sold for $3,000....

Use an appropriate analysis technique of your choosing to evaluate the following three mutually exclusive projects...

Use an appropriate analysis technique of your choosing to evaluate the following three mutually exclusive projects each lasting 6 years. Which project should be selected if MARR = 6%. Project 1 involves an initial cost of $300,000 and annual costs of $50,000. The project will generate annual revenues of $110,000. At the end of year 6, the project will have a salvage value of $25,000. Project 2 will require an initial investment of $150,000 and annual costs of $25,000. There...

Consider the following cash flows of two mutually exclusive projects for Braisl Rubber Co. Assume the...

Consider the following cash flows of two mutually exclusive projects for Braisl Rubber Co. Assume the discount rate for both projects is 9 Percent. Year Dry PrePreg Solvent PrePreg 0 1,820,000 810,000 1 1,112,000 435,000 2 924,000 720,000 3 762,000 414,000 a. What is the payback period for both projects? Dry PrePreg Years Solvent PrePreg Years b. What is the NPV for both projects? Dry PrePreg Solvent PrePreg c. What is the IRR for both projects? Dry PrePreg % Solvent...

Question