Question: Your company has Evaluating two project A & B. You have calculated PV, IRR and Profitability Index of these projects as given below Project

Your company has Evaluating two project A & B. You have calculated

Your company has Evaluating two project A & B. You have calculated PV, IRR and Profitability Index of these projects as given below Project PV A B $25 million Initial Investment $10 million $100 million $50 million IRR 10% 12% Profitability Index ? 1)Calculate profitability Index of Project A and B M-04 M-02 1) Which project do you accept in case these projects are mutually exclusive and why? b)Calculate IRR if you invest Rs. 150,000 and you will get 40,000 per annum in next five years (Find IRR between 10% to 11%) M-04

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a To calculate the profitability index we need the formula Profitability Index PV of Cash Flows Init... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...

KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...

Situated in the foothills of the Himalayas is the city of Amra, famous for the captivating beauty of its landscape and meadows. To give an impetus to the economic welfare of this region while given...

Refer to the following for questions 1 through 9 A company with $60 million in assets is funded with $40 million in equity and $20 million in debt. Last year it made $9 million in net income, 25% of...

QUESTION 2: WEIGHTED AVERAGE COST OF CAPITAL (60 Marks) 2.1. Darwin Enterprises is a large, publicly listed company and is the market leader in manufacturing dehumidifiers. The company is looking to...

Please help answering this project Capital Budgeting Decisions CASE STUDY Learning Objectives 1. Understand how to use EXCEL Spreadsheet (a) Develop proforma Income Statement Using Excel Spreadsheet...

MNO Company is evaluating two projects, Project G and Project H. The initial investment for both projects is $350,000, and the company's cost of capital is 11%. The expected net cash flows are: Net...

User Initial layout ( 4 5 , 0 0 0 , 0 0 0 . 0 0 ) additional funding in net working capital ( 6 , 0 0 0 , 0 0 0 . 0 0 ) additional capital expenditure ( 1 0 , 0 0 0 , 0 0 0 . 0 0 ) life of project 8...

STG is a trading firm with a focus on the technical industry. The estimated cost of the investment is $28 million. The investment is planned to last eight years, at which point its salvage value is...

Explain the problems associated with inappropriate practices.

Many polycyclic aromatic compounds have been synthesized by a cyclization reaction known as the Bradsher reaction or aromatic cyclodehydration. This method can be illustrated by the following...

Choose the correct statement about the following series: n = 0 n 1 0 ( 1 0 ) n + 1 Group of answer choices n 1 0 is larger than 1 for all n > 1 0 so this series diverges. This alternates between...

Starfax, Inc., manufactures a small part that is widely used in various electronic products such as home computers. Results for the first three years of operations were as follows (absorption costing...

Meet the Marcottes, Martin and Luz Marcotte that is. Martin is a successful graphics designer who is 38 years old, while Luz is a counseling psychologist, 35 years old, and is working at a State...

5. Individual Problems 16-5 Your pharmaceutical firm is seeking to open up new international markets by partnering with various local distributors. The different distributors within a country are...

Rondo ltd is a restaurant equipment supply company with offices and retail stores in Ontario and Qubec. The organization started operations in 1993and currently has an approximate annual payroll of...

After reading Kathleen Brown's Good Wives, Nasty Wenches, & Anxious Patriarchs, answer the questions below. Goal to understand the overall answer to this question. What role does gender play in...

use cylindrical coordinates to calculate the triple integral f(x,y,z)dV for the function f(x,y,z)=1/484zx^2+y^2

Define (a) Sole proprietorship, (b) Partnership, and (c) Corporation.

You own 150 shares of James Corporation preferred stock at a market price of $ 22 per share. James pays dividends of $ 1.55. What is your expected rate of return? If you have a required rate of...

Don Draper has signed a contract that will pay him $ 80,000 at the beginning of each year for the next 6 years, plus an additional $ 100,000 at the end of year 6. If 8 percent is the appropriate...

11.43. The Economist magazine5 developed a qualityof-lifc index for nations as the predicted value obtained by regressing an average of lifesatisfaction scores from several surveys on gross domestic...

11.41. A study3 of mortality rates found in the U.S. that states with higher income inequality tended to have higher mortality rates. The effect of income inequality disappeared after controlling for...

11.34. Refer to the "OECD data" file at the text Web site, shown in Table 3.11 on page 62 of Chapter 3. Pose a research question about how at least two of the variables shown in that table relate to...