Calculate profitability index of project, Basic Statistics

Your division has been allocated $15M for capital projects for the coming year. You've been able to identify five potential projects, as outlined in the table below, each of which will last 10 years.

Project Name

Initial Cost

Annual Cash Flows

Discount Rate

Alpha

8M

2M

6%

Bravo

7.5M

2.25M

9%

Charlie

4M

0.75M

3%

Delta

5M

0.6M

4%

Echo

2M

0.5M

10%

a. Show the profitability index of each project.

b. Which project(s) should the firm undertake?

c. Which project(s) would the firm undertake if capital is not rationed? 

 

 

 

Posted Date: 3/1/2013 12:05:53 AM | Location : United States







Related Discussions:- Calculate profitability index of project, Assignment Help, Ask Question on Calculate profitability index of project, Get Answer, Expert's Help, Calculate profitability index of project Discussions

Write discussion on Calculate profitability index of project
Your posts are moderated
Related Questions
Ask questio How many women must be randomly selected to estimate the mean weight of women in one age group? We want 90% confidence that the sample mean is within 3.7 lbs of the po

The Washington Corp stock has a β of 1.15 and it will pay a dividend of $2.50 next year. The expected rate of return of the market is 17% and the current riskless rate is 9%. The e


If q=2,TP=450 and AP=225, what is MP. How can I figure out what my marginal product will be?

Classification feature of Accounting Transaction. Under the classification accountant posts the entries into their respective ledgers in the Accounts Books. Every Account entry

Arnold Palmer and Tiger Woods are two of the best golfers ever to play the game. To show how these two golfers would compare if both were playing at the top of their game, the foll

Prior to the last payroll period of the calendar year, the cumulative earnings of Employer A were $105000. The earnings for the last payroll period of the year which will be paid o

What is a hypothesis test? Why do we need to use them to make decisions about relating sample results to the population; why can’t we just make our decisions by the sample value?

#question.differentiate between historigram and histogram.

Balance of Payments, Mobility of Labor and Capital, Trade and Wages Balance of Payments 1. Will a country running a trade deficit import or export capital?  Explain. 2.