internal rate of return decision rule, Financial Management

Towson Enterprises has recognized two mutually exclusive (can’t do both) projects.  The relevant cash flows and timing of those cash flows are shown in the following table.  Suppose that the cash flows in years 1 through 4 all are received at the finish of the year.

 

Year

Project A

Project B

At Start

$ (50,000)

$ (50,000)

1

26,000

12,000

2

20,000

16,000

3

16,000

20,000

4

12,000

26,000

( a )        What is the approximate internal rate of return for every of the two projects?  If you apply the internal rate of return decision rule, which project should Towson accept?

 (b)         If the needed rate of return is 9%, what is the net present value for every  of the two projects?  Which project would Towson select if it applies the net present value decision rule

 

Posted Date: 3/26/2013 7:48:34 AM | Location : United States







Related Discussions:- internal rate of return decision rule, Assignment Help, Ask Question on internal rate of return decision rule, Get Answer, Expert's Help, internal rate of return decision rule Discussions

Write discussion on internal rate of return decision rule
Your posts are moderated
Related Questions
Q. What is Affiliated Company? Affiliated Company - Company or other organization related through common ownership,common control of management or owners or through some other

Assume today is 3 December 2009. Helen is 30 years old and has a Bachelor of Business. She is currently employed as a personal banker for ANZ banking group in Sydney and earns $380

Expects the per capita expenditure: A township expects its population of 5,000 to grow annually at the rate of 5%. The township currently spends $300 per inhabitant, but, as t

Describe the sales forecasting process. Sales assumptions are a group effort. Marketing and Sales personnel usually provide assessments of demand and the competition.  Producti

Question 1: (a) Discuss the main limitations of using changes in national income as an index of economic welfare. (b) What are the alternatives measures and issues that sho

What are compensating balances and why do banks require them from some customers?  Under what circumstances would banks be most likely to impose compensating balances? Compensa

Calculate the Operating Cashflows from 2007 - 2011 using the indirect method to add back depreciation. Suppose that depreciation will grow at the similar rate as sales.

State the factors of Small organisations - More creative and dynamic - More flexible to adapt to environmental changes - More informal and small for example some people l

Net Present Value (NPV) : In this technique, future cash flows are discounted to the present and then compared with the investment outlay. The basic discount rate is generally

LKL PLC Project VZ (a) Cash Flow budget and NPV WORKINGS