What are the advantages of evaluating projects using the net present value and internal rate of return methods instead of the payback and accounting rate of return methods?
Answer to relevant QuestionsHow the internal rate of return (IRR) is determined if there are uneven cash flows?Suppose you face the prospect of receiving $900 per year for the next five years plus an extra $900 payment at the end of five years. Determine how much this prospect is worth today if the required rate of return is 12 ...Great Northern Fishing Company is contemplating additional revenue of $26,000 per year for seven years. Additional costs, other than depreciation, will equal $12,000 per year. The smoker has an expected life of seven years, ...Quality Shoe Company is considering investing in one of two machines that attach heels to shoes. Machine A costs $70,000 and is expected to save the company $20,000 per year for six years. Machine B costs $95,000 and is ...Van Doren Corporation is considering producing a new product, Autodial. Marketing data indicate that the company will be able to sell 45,000 units per year at $30. The product will be produced in a section of an existing ...
Post your question