Question

In: Finance

DISCUSS QUESTION #3 (Refer to Handouts for Chapter 11 posted in Content) The following TWO projects...

DISCUSS QUESTION #3 (Refer to Handouts for Chapter 11 posted in Content)

The following TWO projects are being considered in this year's capital budget.

PROJECT 1: Assume the Cost of Capital is 10% for this project

cash flows
year project
0 -34,000
1 17,000
2 15,000
3 13,000

PROJECT 2: This project has a life of 3 years. The initial investment is $15,000 with annual cash inflows of $7,000. Assume the Cost of Capital is 9% for this project.

REPLY POST: Question 3

1) Calculate the NPV for Project 1

2) Calculate the IRR and MIRR for Project 2

3) Based on your calculations, should these projects be accepted or rejected?

Solutions

Expert Solution

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Challenge Exercise 3- Chapter 7 Expands on: E7-11 LO:  3 The following information pertains to Two Guys...
Challenge Exercise 3- Chapter 7 Expands on: E7-11 LO:  3 The following information pertains to Two Guys Video Company. 1. Cash balance per bank, July 31, $7,363. 2. July bank service charge not recorded by the depositor $22. 3. The bank erroneously charged another company’s $700 check against Two Guys’ account. 4. Cash balance per books, July 31, $8,784. 5. The bank charged Two Guys account $350 for a customer’s NSF check. 6. Deposits in transit, July 31, $2,200. 7. Two...
Chapter 8: Employees and Payroll Additionally, please refer to Chapter 11 in your Cengage Accounting eText,...
Chapter 8: Employees and Payroll Additionally, please refer to Chapter 11 in your Cengage Accounting eText, accessible from the eText link in the Course Navigation Panel to the left of your screen. Requirement Tonya Latirno is a staff accountant for Cannally and Kennedy, a local CPA firm. For the past 10 years, the firm has given employees a year-end bonus equal to two weeks' salary. On November 15, the firm's management team announced that there would be no annual bonus...
Chapter 2: QuickBooks Chart of Accounts and Chapter 3: QuickBooks Transactions Additionally, please refer to Chapter...
Chapter 2: QuickBooks Chart of Accounts and Chapter 3: QuickBooks Transactions Additionally, please refer to Chapter 2 in your Cengage Accounting eText, accessible from the eText link in the Course Navigation Panel to the left of your screen. Requirement 1: ABC Company adheres to a policy of depositing all cash receipts in a bank account and making all payments by check. The cash account as of December 31 has a credit balance of $1,850, and there is no undeposited cash...
Question 1 (of 11)Question 2 (of 11)Question 3 (of 11)Question 4 (of 11)Questions 5 - 6...
Question 1 (of 11)Question 2 (of 11)Question 3 (of 11)Question 4 (of 11)Questions 5 - 6 (of 11)Questions 7 - 9 (of 11)Questions 10 - 11 (of 11)  Save & ExitSubmit   Time remaining: 0:51:30   Problem 7-5A Determine depreciation under three methods (LO7-4) [The following information applies to the questions displayed below.] University Car Wash built a deluxe car wash across the street from campus. The new machines cost $270,000 including installation. The company estimates that the equipment will have a residual...
Question 3 Consider the following two mutually exclusive projects. The required rate of return is 10%....
Question 3 Consider the following two mutually exclusive projects. The required rate of return is 10%. Part A: Calculate the NPV for each project. Year Project A Project B 0 -$100,000 -$100,000 1 30,000 80,000 2 40,000 20,000 3 60,000 20,000 Part B: Calculate the IRR for each project. Part C: Calculate the payback period for each project. Part D: Suppose you were the manager deciding between these two projects. Would you prefer to use the payback period decision rule...
Chapter 15 Discussion Group Question                                Gender differences in dream content
Chapter 15 Discussion Group Question                                Gender differences in dream content are well documented (see Winget & Kramer, 1979). Suppose a researcher studies aggression content in the dreams of men and women. Each participant reports his or her most recent dreams. Then each dream is judged by a panel of experts to have low, medium, or high aggression content. The observed frequencies are shown in the following matrix:    Aggression Content Low medium high female 18 4 2 male 4...
For questions #3-11, refer to the following: Teacher evaluations, 1=poor and 10=excellent are represented below for...
For questions #3-11, refer to the following: Teacher evaluations, 1=poor and 10=excellent are represented below for 3 teachers of the same subject. Use α = 5% to determine if the teacher's evaluations are the same or different. teacher #1: 10, 8, 9, 9, 8, 7, 5, 8 teacher #2: 9, 8, 8, 7, 7, 6, 7, 6, 5 teacher #3: 7, 8, 6, 5, 6, 10, 8 #3) What is the value for SSW? a. 35.85 b. 30,018.86 c. 1310.14...
Discuss the relevancy and application of linear programming to business. This question was posted before but...
Discuss the relevancy and application of linear programming to business. This question was posted before but the answer was hand written and not legible to read, if the answer is hand written can it please be legible. I need to type 2 page on this subject.
PA11-3 Comparing, Prioritizing Multiple Projects [LO 11-1, 11-2, 11-3, 11-6] Hearne Company has a number of...
PA11-3 Comparing, Prioritizing Multiple Projects [LO 11-1, 11-2, 11-3, 11-6] Hearne Company has a number of potential capital investments. Because these projects vary in nature, initial investment, and time horizon, management is finding it difficult to compare them. Assume straight line depreciation method is used.    Project 1: Retooling Manufacturing Facility This project would require an initial investment of $5,250,000. It would generate $937,000 in additional net cash flow each year. The new machinery has a useful life of eight years...
PA11-3 Comparing, Prioritizing Multiple Projects [LO 11-1, 11-2, 11-3, 11-6] Hearne Company has a number of...
PA11-3 Comparing, Prioritizing Multiple Projects [LO 11-1, 11-2, 11-3, 11-6] Hearne Company has a number of potential capital investments. Because these projects vary in nature, initial investment, and time horizon, management is finding it difficult to compare them. Assume straight line depreciation method is used. Project 1: Retooling Manufacturing Facility This project would require an initial investment of $5,650,000. It would generate $1,009,000 in additional net cash flow each year. The new machinery has a useful life of eight years...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT