Explain why quantitative measures, Macroeconomics

Assignment Help:

Suppose a company is considering two investment projects. Both projects require an upfront expenditure of $30 million. The company estimates that the cost of capital is 10% and that the investments will result in the following after-tax cash flows (in millions of dollars). Complete parts (a) through (e) below.

Year

Project A

Project B

1

$28

$10

2

$20

$15

3

$10

$20

4

$5

$25

a)  Find the regular payback period for each project.

b)  Find the discounted payback period for each project.

c)  Assume that the two projects are independent and the cost of capital is 10%. Which project or projects should the company undertake? Base your results on the NPV.

d) Assume that the two projects are mutually exclusive and the cost of capital is 5%. Which project or projects should the company undertake? Base your results on the MIRR.

e) Explain why quantitative measures may not always be the best way to evaluate a project.


Related Discussions:- Explain why quantitative measures

How to find nominal gdp in the current year, Consider an economy that produ...

Consider an economy that produces only three types of fruit: apples, oranges & bananas. In the base year the production & price data are as follows: Fruit

The short-run macroeconomic equilibrium, The figure below defines an econom...

The figure below defines an economy's aggregate demand curve and its short-runand long-run aggregate supply curves (labelled AD, SRAS, and LRAS, respectively). practically,the econ

Demand analysis, how the demand of pizzas in pizza hut affecting the market...

how the demand of pizzas in pizza hut affecting the market of fast food

What is meant by the term national debt?, When a government spends more tha...

When a government spends more than it receives in taxes; it runs a budget deficit, which is generally covered by issuing debt obligations to domestic and/or international investors

Determine what would be lowest bid of sfi , Snake Farm Inc. (SFI) has been ...

Snake Farm Inc. (SFI) has been offered to submit a competitive bid for building 31 and 22, 18, and 11offshore pits per year for Athletic Inc. over the next four years.  If the bid

How can an economic development be measured, How can an economic developmen...

How can an economic development be measured? The UN has developed an extensively accepted set of indices to measure development in opposition to a mix of composite (element or

Lilie, What are the requirements for something to be considered money? Why ...

What are the requirements for something to be considered money? Why does the dollar have value?

Investment multiplier, what is the formula for calculating investment multi...

what is the formula for calculating investment multiplier for 4 sector economy?

State the appropriate null and alternative hypotheses, Suppose a new produc...

Suppose a new production method will be implemented if a hypothesis test supports the conclusion that the new method reduces the mean operating cost per hour. a. State the appro

Bop on capital account, BOP on Capital Account: BOP on Capital Account...

BOP on Capital Account: BOP on Capital Account  shows only export and import of capital and  the difference between  the  two represents a country's capital account balance. C

Write Your Message!

Captcha
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