Question: Finance case study Can anyone use excel to do this question Finance case study Question ABC Valuing Capital Investment Projects Growth Enterprises, Inc. (GED has
Finance case study Question ABC Valuing Capital Investment Projects Growth Enterprises, Inc. (GED has S40 million that it can invest in any or all of the four capital investment projects, which have cash flows as shown in Table 1 below Table 1 Comparison of hoject Cash Rows. thousands) Year of Cash Flow Type of Cash Flow Project Year 0 Year 1 Year 2 Year 3 A. 21,000 11000 $15,000 17.000 7833 11000 $0000 15,555 D. Operating expenses All revenues and can be consdered cad iems Each of these projects is considered to be of equivalent risk. The investment will be depreciated to zero on a straight-line basis for tax purposs CETs marginal corporate tax rate o taxable income is 40%. None of the projects will have any salvage value at the end of their respective lives. For purposes of analysis, it should be assumed that all cash flows occur at the end of the year in question Rank GEI's four projects acconding to the follouring for commonly wsed capital budgeting Payback period U exercise, the accounting Accounting return on immtmmt. For- of return on innestment should he dfined as ells 3) Internal rate of neturn 4) Net present nihe, assanning alternatrly 20% discount 'trand.35% dicount R Why do the rankings differ? What does each techmiu esune and hat assumptions does it C. If the projects are independent of each other,anbich showld be accepted? If they ane mutwally rate. exclusive (ieone and only one can be accepted), aic one is best? Finance case study Question ABC Valuing Capital Investment Projects Growth Enterprises, Inc. (GED has S40 million that it can invest in any or all of the four capital investment projects, which have cash flows as shown in Table 1 below Table 1 Comparison of hoject Cash Rows. thousands) Year of Cash Flow Type of Cash Flow Project Year 0 Year 1 Year 2 Year 3 A. 21,000 11000 $15,000 17.000 7833 11000 $0000 15,555 D. Operating expenses All revenues and can be consdered cad iems Each of these projects is considered to be of equivalent risk. The investment will be depreciated to zero on a straight-line basis for tax purposs CETs marginal corporate tax rate o taxable income is 40%. None of the projects will have any salvage value at the end of their respective lives. For purposes of analysis, it should be assumed that all cash flows occur at the end of the year in question Rank GEI's four projects acconding to the follouring for commonly wsed capital budgeting Payback period U exercise, the accounting Accounting return on immtmmt. For- of return on innestment should he dfined as ells 3) Internal rate of neturn 4) Net present nihe, assanning alternatrly 20% discount 'trand.35% dicount R Why do the rankings differ? What does each techmiu esune and hat assumptions does it C. If the projects are independent of each other,anbich showld be accepted? If they ane mutwally rate. exclusive (ieone and only one can be accepted), aic one is best
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