1. Project A and Project B cost OR 100,000 and OR 50,000 respectively. Evaluate the project...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
1. Project A and Project B cost OR 100,000 and OR 50,000 respectively. Evaluate the project using each of the following methods. For each method, should the project be accepted or rejected? Justify your answer based on the method used to evaluate the project's cash flows. The required rate of return on the project is 8%. a. Net present Value b. Profitable Index c. Internal rate of return d. Average rate of return Cash Inflows Project A Project B 10,000 20,000 30,000 20,000 60,000 20,000 4 40,000 20,000 5 20,000 Year 1 2 3 1. Project A and Project B cost OR 100,000 and OR 50,000 respectively. Evaluate the project using each of the following methods. For each method, should the project be accepted or rejected? Justify your answer based on the method used to evaluate the project's cash flows. The required rate of return on the project is 8%. a. Net present Value b. Profitable Index c. Internal rate of return d. Average rate of return Cash Inflows Project A Project B 10,000 20,000 30,000 20,000 60,000 20,000 4 40,000 20,000 5 20,000 Year 1 2 3
Expert Answer:
Answer rating: 100% (QA)
Calculation of Present Value of Cash flow of Project A B Year Discount Factor 8 Project A Present Value 1 09259 1000000 925900 2 08573 3000000 2571900 ... View the full answer
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324597707
12th edition
Authors: Eugene F. Brigham, Joel F. Houston
Posted Date:
Students also viewed these finance questions
-
Based on the processes used to make fibers, as described in this chapter, explain how you would produce carbon foam. How would you produce metal foam?
-
Should a project be accepted or rejected if the project has an internal rate of return that is less than the companys hurdle rate? You are the CFO for an automobile manufacturer. The board of...
-
You are evaluating two projects, Project A and Project B . Project A has a short period of future cash flows, while Project B has relatively long future cash flows. Which project will be more...
-
What are the advantages and disadvantages of decentralization? Would you prefer to work in a centralized or decentralized organization and why? What are opportunity costs and what are the economic...
-
A traveling production of Jersey Boys performs each year. The average show sells 1,000 tickets at $60 a ticket. There are 120 shows each year. The show has a cast of 75, each earning an average of...
-
Pruitt Corporation owns 90% of the common stock of Sedbrook Company. The stock was purchased for $540,000 on January 1, 2022, when Sedbrook Companys retained earnings were $100,000. Preclosing trial...
-
What are the purposes of regeneration, intercooling and reheating in a gas turbine? Compare Rankine cycle with Carnot cycle.
-
Goal Sports Ltd. is authorized to issue $3,000,000 of 10%, 10-year bonds payable. On December 31, 2010, when the market interest rate is 12%, the company issues $2,400,000 of the bonds and receives...
-
2. Fill-in the following using the data below. (42 points) At Haddon, Inc., the office workers are employed for a 40-hour workweek. All workers, except King and Manera, are entitled to overtime pay...
-
Using Rhodes Corporation's financial statements (shown below), answer the following questions. a. What is the net operating profit after taxes (NOPAT) for 2012? b. What are the amounts of net...
-
Roughly 48% of public school funding comes from the State of Arizona's general fund. The general fund is made-up primarily of state income and sales taxes. Local property taxes contribute...
-
Write static methods: that compute the volume and surface area of a cube with height h, sphere with radius r, a cylinder with circular base with radius r and height h, and a cone with circular base...
-
Write a class PieChart with methods: that displays a pie chart of the added values. Assume that all data values are positive. public void add(double value) public void draw (Graphics2D g2)
-
An example of directness, which moves swiftly into spite, is shown in Figure 5.4, where UK retailer Argos had many angry customers taking to Twitter and explaining that the traditional telephone...
-
Repeat Exercise E8.9 , using multiple classes. Provide a GradeBook class that collects objects of type Student. Data from Exercise E8.9 Modify the application of How To 7.1 so that it can deal with...
-
Google spends a significant amount on research: as an example, at the end of 2016 it had 27,169 full-time employees working in research and development and spent nearly $14 billion on research...
-
Pennington Inc. makes tables. The cost to manufacture an unfinished table is $37. Below is detail information of manufacturing cost per Direct materials Direct labor Variable manufacturing overhead...
-
Keating & Partners is a law firm specializing in labour relations and employee-related work. It employs 25 professionals (5 partners and 20 managers) who work directly with its clients. The average...
-
Assume that you recently graduated with a degree in finance and have just reported to work as an investment adviser at the brokerage firm of Smyth Barry & Co. Your first assignment is to explain the...
-
Coleman Technologies is considering a major expansion program that has been proposed by the companys information technology group. Before proceeding with the expansion, the company must estimate its...
-
Part I of this case, presented in Chapter 3, discussed the situation of DLeon Inc., a regional snack foods producer, after an expansion program. DLeon had increased plant capacity and undertaken a...
-
You had planned to construct a series of eight traffic roundabouts in your town, with each roundabout costing $150,000. Your goal was to complete the project during the four (4) months of good...
-
Go to www.brighthubpm.com/monitoring-projects/51982-understanding-the-s-curve-theory-for-project-management-monitoring/ and read the article on the multiple uses of project S-curves. What does the...
-
Consider the following project information. The total budget is $36,000 and is expected to last six months. After four months, you have calculated the following information about the project: PV =...
Study smarter with the SolutionInn App