Question: Please can you help me to resolve this problem with the given formulas. No sure how to resolve it: Payback = C o s t
Please can you help me to resolve this problem with the given formulas. No sure how to resolve it:
Payback
IRR
Solve for the return rate
XYZ company is considering multiple projects for the coming year. In addition to the dollar metrics associated with each project, critical decision factors include: how simple the project will be to deploy, how likely the competition is to reactrespond and the risk that legislation will impact the project. Of these three risks, XYZ has identified the Risk of Legislation as being twice as important as the other qualitative factors. XYZ company currently operates under a hurdle rate.
Project
Build and deploy a proprietary ERP system in house.
Est cost this year: $ million
Cashflows: $ million
Cashflow Growth yearoveryear: year
Useful Life: years
Ease of Deployment: Low
Competitive Reaction: Low
Risk of Legislation: Moderate Project
Develop and bring to market a new product line.
Est cost this year: $ million
Cashflows: $ million
Cashflow Growth yearoveryear: year
Useful Life: years
Ease of Deployment: Low
Competitive Reaction: High
Risk of Legislation: Moderate
Project
Lean the production system to reduce operational waste.
Est cost this year: $ million
Cashflows: $ million
Cashflow Growth yearoveryear: year
Useful Life: years
Ease of Deployment: High
Competitive Reaction: Moderate
Risk of Legislation: Low Project
Build a new warehouse enabling more efficient logistics
Est cost this year: $ million
Cashflows: $ million
Cashflow Growth yearoveryear: year
Useful Life: years
Ease of Deployment: Moderate
Competitive Reaction: Low
Risk of Legislation: High
Calculate for each project: Payback Period, NPV IRR, Benefit Cost Ratio. Rank the projects from best to worst investments, economically. Which if any projects would you recommend? Show your work & attach files.
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