Used methods of determining capital budgeting decisions

Assignment Help Financial Management
Reference no: EM13868299

According to research, NPV and IRR are the most used methods of determining capital budgeting decisions. Discuss the positive and negative aspects of these and any other methods you deem relevant. Finally, state the method you would use as a financial manager and explain why.

Reference no: EM13868299

Questions Cloud

Equal year-end deposits into savings account : For the next 14 years, you decide to place $3,315 in equal year-end deposits into a savings account earning 8.03 percent per year. How much money will be in the account at the end of that time period?
Home improvement store has a washing machine on sale : The home improvement store has a washing machine on sale for $601. With the period due in two years from today. The store is willing to discount the price at an annual rate of 9% ( Compounded annually) if you pay today. What is the amount if you pay ..
What are the various kinds of budgets : You are a manager in a fictitious company of your choice. Your director has asked you to explain to the department staff the different types of budgets and techniques in order to provide an overall understanding. What are the various kinds of budgets..
Interest received at the end of the year is reinvested : You placed $1,360 in a savings account today that earns an annual interest rate of 9 percent compounded annually. How much will you have in this account at the end of 17 years? Assume that all interest received at the end of the year is reinvested th..
Used methods of determining capital budgeting decisions : According to research, NPV and IRR are the most used methods of determining capital budgeting decisions. Discuss the positive and negative aspects of these and any other methods you deem relevant. Finally, state the method you would use as a financia..
What is your return assuming dividend of per share is paid : Suppose the call money rate is 4.5 percent, and you pay a spread of 2.5 percent over that. You buy 600 shares of stock at $78 per share. You put up $18,000. One year later, the stock is selling for $86 per share and you close out your position. What ..
What is your total dollar return from this investment : You’ve just opened a margin account with $18,000 at your local brokerage firm. You instruct your broker to purchase 750 shares of Landon Golf stock, which currently sells for $78 per share. What is your total dollar return from this investment? What ..
What are your key negotiating principles : Consider a situation where you are negotiating with Wal-Mart for your family farm’s milk. Confronted with various hardball price challenges, what type of negotiation situation would you use: distributive or integrative and why? What are your key nego..
Accounted for under the weighted-average method : In February, one of the processing departments at Whisenhunt Corporation had beginning work in process inventory of $38,000 and ending work in process inventory of $15,000. During the month, the cost of units transferred out from the department was $..

Reviews

Write a Review

 

Financial Management Questions & Answers

  What is the value of the bake shoppes net fixed assets

The Bake Shoppe has net working capital of $6,100, long-term debt of $10,400, total debt of $15,200, and owners' equity of $18,900. What is the value of The Bake Shoppe's net fixed assets?

  Form of derivative contract

A survey by Fitch Ratings found that capital market participants felt that Credit Default Swaps, a form of derivative contract that pays off if the named underlier defaults on its debt obligations, are both more important as indicators of counterp..

  Cemetery project will provide net cash inflow

The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M. Deep, business is "looking up". As a result, the cemetery project will provide net cash inflow of $104,000 for the firm during the first year, and the..

  Capital rationing lead to non-optimal investment decisions

A prospectus for a bond issue will normally list both the price to the public and the proceeds to the company. Capital rationing may lead to non-optimal investment decisions.

  Equity mutual fund

Rodney Cashman has been investing $2,000 quarterly for the past 18 years in an equity mutual fund. How much is the fund worth now assuming he has earned 11.5% compounded quarterly on his investment?

  Assuming reasonable debt levels and good credit

Common stock financing is often considered the safest form of financing, as the issuing firm is under no obligation to pay dividends. Owners of common shares assume this uncertainty in the hope of favorable returns. Debt financing, assuming reasonabl..

  What will be the value of her retirement account

Carla Lopez deposits $3,000 a year into her retirement account. If these funds have an average earning of 8 percent over the 40 years until her retirement, what will be the value of her retirement account?

  What is the break-even number of units

Your run a toy company that is considering updating your electric tricycle line. The upgrades will cost $30 million and will add a fixed cost of $1 million per year, but will decrease your variable costs by $40 per unit. What is the NPV of this proje..

  Explain time value of money

You've been saving up for a new car that you think costs $25,000. You already have $10,000 and you think that, with interest and additional savings, the $10,000 will grow to $20,000 in three years. What would you do? Assume that the price of the car ..

  A non-dividend-paying stock is currently priced

A non-dividend-paying stock is currently priced at $46.57. The risk-free rate is 5.6 percent, and a futures contract on the stock matures in five months. What price should the futures be?

  Strik-it-rich gold mining company is contemplating expanding

The Strik-it-Rich Gold Mining Company is contemplating expanding its operations. To do so it will need to purchase land that its geologists believe is rich in gold. Strik-it-Rich’s management believes that the expansion will allow it to mine and sell..

  Discuss interest rate swaps and stock options describe the

1 explain interest rate swaps and stock options.2 explain the role that credit default swaps played in the financial

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