Alternative proposals to enhance firms manifesting facility

Assignment Help Financial Management
Reference no: EM13847096

You have just joined the Maarets Group and your boss asks you to review a recent analysis that was done to compare three alternative proposals to enhance the firms manifesting facility. You find that the prior analysis ranked the proposals according to their IRR and recommended the highest IRR option, Proposal A. You are concerned and decide to redo the analysis NPV to determine whether this recommendation was appropriate. But while you are confident the IRRs were computed correctly, it seems that some of the underlying data regarding the cash flows that were estimated for each proposal was not included in the report. Here is the information you have, all amounts in millions of GHS:

Proposal IRR Year 0 Year 1 Year 2 Year3

A 60% -60 30 153 88

B 55% ? 0 206 95

C 50% -100 37 0 204+?

a) which projects would recommend based on the NPV of each proposal if the appropriate cost of capital is 10%?

b) would your recommendation be valid if the company has capital limitation of ghs 285million? explain your answer with appropriate detail.

Reference no: EM13847096

Questions Cloud

Trade credit-increasing accounts payable : The Thompson Corporation projects an increase in sales from $1 million to $3 million, but it needs an additional $300,000 of current assets to support this expansion. Thompson can finance the expansion by no longer taking discounts, thus increasing a..
Are there any ethical concerns in the case why not why not : Does Blue Ridge Paper Products' (BRPP) policy differ from a traditional employee stock ownership plan (ESOP)? What are the implications? Are there any ethical concerns in the case? Why? Why not
Use the equivalent annual cost approach to evaluate : A company wishes to select the best of three possible computers, each expected to meet the University's growing need for computational and storage capacity. The three computers— A, B, and C—are equally risky. Calculate the NPV for each computer over ..
Analyze why cisco landed in financial trouble : Study the networked supply chain concept as implemented by Cisco. What are its strengths and weaknesses - Analyze why Cisco landed in financial trouble
Alternative proposals to enhance firms manifesting facility : You have just joined the Maarets Group and your boss asks you to review a recent analysis that was done to compare three alternative proposals to enhance the firms manifesting facility. which projects would recommend based on the NPV of each proposal..
What is the crux of the research problem : What is the crux of the research problem. What are some alternative approaches to address the research problem. What is a better way to substantiate the claim of the authors
How many shares of common stock does jlf have : How many shares of common stock does JLF have outstanding at December 31, 2011? Prepare a schedule to support your answer.
What is the firms investment in accounts receivable : Tauscher Textiles Corporation has an inventory conversion period of 45 days, a receivables collection period of 47 days, and a payables deferral period of 35 days. If Tauscher's sales are $3,309,028 and all sales are on credit, what is the firm's inv..
Should the company lease or buy the car : The lease would be for four years and requires a $7,500 payment. The company also has an initial cost of $2,500 for transporting the car. At the end of the lease, the van will return to the leasing company. The cost of capital is 8%. Should the compa..

Reviews

Write a Review

 

Financial Management Questions & Answers

  Cost of capital equal to the expected return on the market

cost of capital equal to the expected return on the market which is 12%. project Used books 0.85 Beta 12% expected return. if the projects are mutually exclusive, which one would be accept.

  Amount the should be invested in treasury bonds

A pension fund manager decides to invest a total of at most $45 million in U.S. Treasury bonds paying 5% annual interest and in mutual funds paying 9% annual interest. He plans to invest at least $5 million in bonds and at least $ 10 million in mutua..

  What is the market rate of return on stock

The common stock of Eddie's Engines, Inc. sells for $37.43 a share. The stock is expected to pay $3.40 per share next year. Eddie's has established a pattern of increasing their dividends by 5.5 percent annually and expects to continue doing so. What..

  Compute the APR and EAR of both loans

Plan B requires quarterly payments of $11,000 for the first year, $7,000 for the second and third year, and $3,000 for the fourth year. Compute the APR and EAR of both loans. Which loan should you take and why?

  Prepare a statement of cash flows for warnick

Prepare a statement of cash flows for Warnick Co. for the year ended May 31, Year2. Use the indirect method.

  Select a portfolio of common stocks in five companies whose

select a portfolio of common stocks in five companies whose stock is traded on the new york stock exchange nyse. base

  High tax bracket-concerned about after tax rate of return

Both a wife and her husband work in the airline industry. They are in their 40s and they have a high tax bracket and are concerned about their after tax rate of return. A meeting with their financial planner reveals they are primarily focused on long..

  What has occurred with companys dividend payout

What has occurred with companys dividend payout, dividend yield, and dividend per share over the past three years -  Do you have any explanations for what has occurred? How does your selected company's dividend payout, dividend yield, and dividend p..

  What is its effective rate and nominal rate

1) The nominal rate of Bank A is 8% and interests are compounded monthly, what is its effective rate? The effective rate of Bank B is 9.31% and interests are compounded four times a year, what is its nominal rate? Suppose the present value of a 2 yea..

  The green motorcar company is producing a new car it is

the green motorcar company is producing a new car. it is flex-fuel plug-in hybrid. a flexfuel vehicle has an engine

  Analyse the value of caraways equity

Analyse the value of Caraway's equity if it pays out a $200,000 cash dividend today and plans to pay a $1.2 million liquidating dividend at the end of one year.

  Find the expected return and standard deviation of portfolio

Find the expected return and standard deviation of a portfolio that is invested 80% in Stock A and 20% in Stock B.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd