Npv, finance, Other Engineering

Problem 1
Suppose a company is considering two independent projects, Project A and Project B. The cash outlay for Project A is $14,000. The cash outlay for Project B is $20,000. The company’s cost of capital is 12%. The following table shows the after-tax cash flows. For each project, compute the NPV, the IRR, the MIRR, and indicate the accept/reject decision.
Year
Project A
Project B
1
$4800
$6700
2
$4800
$6700
3
$4800
$6700
4
$4800
$6700

























Problem 2
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

Find the regular payback period for each project.
Find the discounted payback period for each project.
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.
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.
Explain why quantitative measures may not always be the best way to evaluate a project.
Posted Date: 3/11/2012 2:33:20 PM | Location : United States







Related Discussions:- Npv, finance, Assignment Help, Ask Question on Npv, finance, Get Answer, Expert's Help, Npv, finance Discussions

Write discussion on Npv, finance
Your posts are moderated
Related Questions
Is there anyone on your staff good with HEC-HMS software for modeling rain events?

derive the expression of deflection of beam in CRO

Interior noise is basically airborne or structure-borne. The excitation sources of vibratation and noise from engines can be divided as mechanical, combustion, and flow sources.

Guidance Control system The control aspect of the guidance system is intended to stabilise the behaviour of the airframe.  The fact that the guidance system will always h

Rajender Kumar was a production worker at competent Motors Limited (CML) which made components and accessories for the automotive industry. He had worked at CML for almost seven ye

Water enters a smooth thin-walled tube of 1 inch diameter at 50F and leaves at 150F. Heat is supplied to the water by condensing steam on the surface of the tube at a constant temp



compute IDFT using DIT and DFT X(K)={20,-5.828-j2.414,0,-0.172-j0.412,0,-0.172+j0.414,0,-5.828+j2.414}

Fuel control in Aircraft Engine: The basic fuel system is comprised of a fuel pump that receives low-pressure fuel from the aircraft fuel tank via a low pressure fuel valv