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In: Finance
Question A [AR1: 5 Marks] Consider the projects described in the table below: End of Year...
Question A [AR1: 5 Marks]
Consider the projects described in the table below:
|
End of Year |
Project A Cash Flow ($) |
Project B Cash Flow ($) |
|
0 |
$–90,000 |
$–90,000 |
|
1 |
17,000 |
0 |
|
2 |
17,000 |
0 |
|
3 |
17,000 |
0 |
|
4 |
17,000 |
0 |
|
5 |
17,000 |
0 |
|
6 |
17,000 |
34,000 |
|
7 |
17,000 |
34,000 |
|
8 |
17,000 |
34,000 |
|
9 |
17,000 |
34,000 |
|
10 |
17,000 |
90,000 |
Both projects have an appropriate risk adjusted discount rate of 7 percent.
Required:
|
a. |
Calculate the NPV and IRR for both projects |
|
b. |
If projects A and B are independent, which will you undertake? |
|
c. |
If projects A and B are mutually exclusive, which will you undertake? |
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Question A [AR1: 5 Marks] Consider the projects described in the table below: End of Year...
Question A [AR1: 5 Marks]
Consider the projects described in the table below:
End of Year
Project A Cash Flow ($)
Project B Cash Flow ($)
0
$–90,000
$–90,000
1
17,000
0
2
17,000
0
3
17,000
0
4
17,000
0
5
17,000
0
6
17,000
34,000
7
17,000
34,000
8
17,000
34,000
9
17,000
34,000
10
17,000
90,000
Both projects have an appropriate risk adjusted discount rate of
7 percent.
Required:
a.
Calculate the NPV and IRR for both...
Consider the portfolio of projects described in the table. The resource requirements are in numbers of...
Consider the portfolio of projects described in the table. The
resource requirements are in numbers of labor hours. The Greatest
Resource Utilization rule would begin work with project:
Project
Date Rec'd
Date Due
Resource 1
Resource 2
Resource 3
A
Apr 2006
Oct 2006
200
0
400
B
Feb 2006
Sep 2006
150
200
170
C
Mar 2006
Aug 2006
0
250
200
D
Jan 2006
Nov 2006
150
100
0
Options:
A.
B.
C.
D.
Question 55: Please indicate the diseases or conditions described in each section below. [5 marks] (a)...
Question 55:
Please indicate the diseases or conditions described in each
section below. [5 marks]
(a) Billions of people consume unregulated concentrations of a
fungal toxin, an alkylating agent, in their staple foods (corn,
ground-nuts, rice). What condition arises from consumption of:
acute, high doses?
chronic, low doses?
(b) What is the painful inflammatory condition that occurs in
joints when macrophages phagocytose crystals of a common
metabolite?
(c) What severe inflammatory condition is characterised by
damage to...
1. Consider the investment projects given in the table below. Net Cash Flow of Project Year...
1. Consider the
investment projects given in the table below.
Net Cash Flow of Project
Year
A
B
C
0
($1,500)
($5,000)
($2,200)
1
$700
$3,000
$1,600
2
$2,500
$4,500
$2,600
a. Compute the IRR for each
project.
b. On the basis of IRR
criteria, if all three projects are mutually exclusive
investments, which project
should be selected at 15% MARR?
c. Create a set of decision
statements for varying MARR from 0% to 60%.
(Do
not provide statements...
5-38 Consider the two mutually exclusive projects in the table below. Salvage values represent the net...
5-38 Consider the two mutually exclusive projects in the table
below. Salvage values represent the net proceeds (after tax) from
disposal of the assets if they are sold at the end of each year.
Both projects B1 and B2 will be available (or can be repeated)
with the same costs and salvage values for an indefinite
period.
B1
B2
n
Cash Flow
Salvage Value
Cash Flow
Salvage Value
0
−$15,000
—
−$30,000
—
1
−2,500
7,500
−2,700
6,500
2
−2,500...
Question 5 (25 marks) – ALL CALCULATIONS MUST BE SHOWN The table below contains information about...
Question 5 – ALL CALCULATIONS MUST BE
SHOWN
The table below contains information about weekly production and
costs of a firm.
Number of Workers
Output (units)
Marginal Product of Labour
Fixed Cost (capital)
Variable Cost (labour)
Total Cost
Marginal Costs
Average Fixed Costs
Average Variable Costs
Average Total Costs
0
--
--
--
--
--
1
330
$600
$300
2
375
$600
$1,200
3
1020
$600
$1,500
4
1260
$600
$1,200
5
150
$600
$2,100
6
1470
$600
$1,800
a....
Consider the mutually exclusive alternatives given in the table below. MARR is 5 % per year....
Consider the mutually exclusive alternatives given in the table
below. MARR is 5 % per year. Assuming repeatability, what is the
equivalent annual worth of the most profitable alternative? (Do not
enter the dollar sign $ with your answer.)
_____________________________________________________________
X Y Z
_____________________________________________________________
Capital
investment $50,000
$25,000
$40,000
Annual
savings $15,000
$8,000
$12,000
Useful
life
(years) 10 15
20
_____________________________________________________________________________
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 Three (20 Marks) a) For each of the companies described below explain which one you...
Question Three
a) For each of the
companies described below explain which one you would expect to
have a medium, high or low dividend payout ratio.
A company with a large proportion of inside ownership, all of
whom are high income
individuals.
A growth company with an abundance of good investment
opportunities.
A company experiencing ordinary growth, has high liquidity and
much unused borrowing
capacity.
A dividend-paying company that experiences an unexpected drop in
earnings from the
trend.
A...
Consider the game in Question 1(I wrote it at the end of this question. See below)....
Consider the game in Question 1(I wrote it at the end of this
question. See below). Assume the only letter available are G, K and
Q and that the game is played sequentially.
a. Write down the game in its extensive form (assume Bill moves
first) and find the Rollback equilibrium(a) of the game
b. Specify the strategies of the two players
c. Draw the game in its strategic form and find the Nash
Equilibria
d. Define a Subgame-Perfect Equilibrium...
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