Make capital budgeting decision using average rate of return

Assignment Help Financial Management
Reference no: EM131307164

Two investment proposals are submitted for approval of $25,000 each in initial investment. Their estimated profits after taxes are:

Year Proposal 1 ($) Proposal 2 ($)
1 2,500 6,000
2 3,300 4,900
3 4,000 4,200
4 5,200 3,150
5 6,100 2,000

Make a capital budgeting decision using the average rate of return method.

Reference no: EM131307164

Questions Cloud

How understanding theory of child development can assist you : Describe how understanding theories of child development can assist you in your chosen profession. Use specific examples and evidence from the textbook and additional research.
Analyze the ability of the top leadership team : analyze the ability of the top leadership team at PepsiCo to recognize and change the way they had responded in the past to the pesticide and water contamination issues.
Construct a depletion schedule for an oil field : Construct a depletion schedule for an oil field that is purchased for $780,000 and promises to produce 25,000, 40,000, 55,000, 45,000, and 35,000 barrels of oil in 5 years.
Discuss the match or mismatch between parenting styles : Discuss the match or mismatch between parenting styles and their child's temperament. How can we as professionals help close this gap? What can you do in your professional role to mediate the conflict?
Make capital budgeting decision using average rate of return : Two investment proposals are submitted for approval of $25,000 each in initial investment. Their estimated profits after taxes are:- Make a capital budgeting decision using the average rate of return method.
Discuss how your topic impacts child development : You will create a multimedia presentation using approximately eight- to ten-slides discussing how your topic impacts child development. You are encouraged to use Prezi for your discussion.
Find the in-plane stresses at this point : A rosette composed of three strain gages measures strain at a point on the surface of a flat sheet of annealed stainless steel loaded in plane stress.
Would you prefer to send your kids to a public school : What are the benefits of education being privatized? What are the drawbacks? What are the benefits of public education? What are the drawbacks? Would you, personally, prefer to send your kids to a public or a private school?
Prepare an adjusted trial balance as of december : Acct 6031 - Fall 2016 Accounting Practice Set. Case Requirements: Please prepare the following for turn-in: An adjusted trial balance as of December 31, 2015

Reviews

Write a Review

Financial Management Questions & Answers

  What is net present value of this project using a discount

What is the Net Present Value of this project using a discount rate of 10%?

  What is the OCF at the base-case quantity sold

Consider a three-year project with the following information: initial fixed asset investment = $865,000; straight-line depreciation to zero over the five-year life; zero salvage value; price = $33.85; variable costs = $22.45; fixed costs = $209,000; ..

  Is Ds right to that amount includable in Ds gross estate

D’s employer owed D $1,500 in salary that had not been paid at time of death. Is D’s right to that amount includable in D’s gross estate? What if the $1,500 is a benefit that D’s employer agreed to pay to D or D’s estate only if D continued to work f..

  What is the cumulative cash surplus at end of first quarter

The Cannon Ball has projected its first quarter sales at $11,200, second quarter sales at $10,900, and third quarter sales at $13,300. The firm's cost of goods sold is equal to 71 percent of the next quarter's sales. The accounts receivable period is..

  Firm is debt financed and what is the after-tax cost of debt

A firm has issued $ 20 million in long-term bonds that now have 10 years remaining until maturity. The bonds carry an 8% annual coupon but are selling in the market for $877.10. The firm also has $45 million in market vale of common stock. If the ris..

  What are the total costs

What are the total costs?

  What is the present value of the growing perpetuity

What is the present value of a perpetual stream of cash flows that pays $80,000 at the end of one year and grows at a rate of 7% indefinitely?

  Preferred stock dividends are tax deductible

All else equal, an increase in a company’s stock price will increase its marginal cost of new common equity, re. If a company’s tax rate increases but the YTM of its noncallable bonds remains the same, the after-tax cost of its debt will fall. When c..

  Company has been approached to bid on a contract

Your company has been approached to bid on a contract to sell 4,000 voice recognition (VR) computer keyboards a year for four years. Due to technological improvements, beyond that time they will be outdated and no sales will be possible. What bid pri..

  Firm issues two tranches of bonds

Let’s suppose that a firm issues two tranches (“series”) of bonds, in addition to preferred stock and retained earnings. It has so much retained earnings that it does not have to issue new equity. However, the two different tranches have different fl..

  As the cost of capital increases

As the cost of capital increases,

  What is the payback period for each project

Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$ 347,000 –$ 49,500 1 48,000 24,300 2 68,000 22,300 3 68,000 19,800 4 443,000 14,900 which ever project you choose, if any, you require a 15 percent return on..

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