User Account

All Pages

Discuss investment and estimated net present values

Assignment Help Accounting Basics
Reference no: EM131753230

Grosvenor Industries has designated $1.2 million for capital investment expenditures during the upcoming year. Its cost of capital is 14 percent. Any unused funds will earn the cost of capital rate. The following investment opportunities along with their required investment and estimated net present values have been identified:

Project Net Investment NPV Project Net Investment NPV
A $200,000 $22,000 F $250,000.00 $30,000.00
B $275,000 $21,000 G $100,000.00 $7,000.00
C $150,000 $6,000 H $200,000.00 $18,000.00
D $190,000 -$19,000 I $210,000.00 $4,000.00
E $500,000 $40,000 J $250,000.00 $35,000.00


In your response, complete the following:

Rank the projects using the profitability index. Considering the limit on funds available, which projects should be accepted?

Using the NPV, which projects should be accepted, considering the limit on funds available?

If the available investment funds are reduced to only $1,000,000:

Does the list of accepted projects change from Part 2?

What is the opportunity cost of the eliminated $200,000?

Reference no: EM131753230

Questions Cloud

Strengths and weakness of the hrm contribution : You have analysed the strengths and weakness of the HRM contribution to your industry - Evidence of a wide range of reading Selection of appropriate material
Determine the amount of dividends to be paid to each class : Determine the amount of dividends to be paid to each class of shareholder for each of the following independent assumptions
What are the equivalent units produced of direct material : A department had 12,500 units which were 20% complete in beginning Goods in Process Inventory. What are the equivalent units produced of direct material
Analyze role that culture plays in global business ethics : Analyze the role that culture plays in global business ethics. Recommend tactical methods that might be used within each of their areas.
Discuss investment and estimated net present values : investment opportunities along with their required investment and estimated net present values
Enough evidence to support the claim : Is there enough evidence to support the claim that, on average, the modified components last longer than 937 hours betweesn failures?
Obtaining news every day from the specific sources : Marketing and Consumer Behavior Americans have many sources for daily news, for example, local television shows, public radio, or national newspapers.
What amount should reported for patent amortization expense : ELO feels that as of that date, the remaining useful life is 5yrs. What amount should be reported for patent amortization expense for 2008
Support the physician claim : Is there enough evidence to support the physician's claim at? Assume a normal distribution.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd