Salalah Methanol company management is considering three competing investment Projects A,B &C Year Project A Project B
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Question:
Salalah Methanol company management is considering three competing investment Projects A,B &C
Year | Project A | Project B | Project C |
Initial Investment | 10000 | 10000 | 10000 |
1 | 1100 | 4160 | 6225 |
2 | 3100 | 5260 | 8250 |
3 | 3800 | 7360 | 9275 |
4 | 4600 | 9460 | 9300 |
Assume a discount Rate of 5.05% |
Use the information below and help the management in choosing the most desirable Project using Net Present value and Profitability Index.
Solution: Net Present value
Formula:
Project A
Project B
Project C
Solution: Profitability Index
Formula:
Project A
Project B
Project C
Related Book For
Finance for Executives Managing for Value Creation
ISBN: 978-0538751346
4th edition
Authors: Gabriel Hawawini, Claude Viallet
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