User Account

All Pages

Does the list of accepted projects change from part 2

Assignment Help Finance Basics
Reference no: EM131018656

Ranking Investment Alternatives. (Problem 10-41) 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 $30,000

B 275,000 21,000 G 100,000 7,000

C 150,000 6,000 H 200,000 18,000

D 190,000 (19,000) I 210,000 4,000

E 500,000 40,000 J 250,000 35,000

In your response, complete the following:

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

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

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

(a) Does the list of accepted projects change from Part 2?

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

Reference no: EM131018656

Questions Cloud

Explain how the gospel is both inclusive and exclusive : Define the [pre-] Gnosticism that St. Paul is addressing in Colossians. What is it basically? Elaborate regarding its core elements in terms of it occult teaching, ritualism, asceticism, and worship. Most importantly study Colossians 2 to explain ..
Write equation in slope-intercept form for libby budget line : Write an equation in slope-intercept form for Libby's budget line. Suppose that Libby maximizes her utility given budget line 1 when she selects a bundle that includes 20 sodas. How many balloons are in this optimal consumption bundle
What can we say about the demand curve : What effect would very bad weather destroying much of the wheat crop have on the market for wheat - What can we say about the demand curve
What is the internal rate of return of a project : What is the internal rate of return (IRR) of a project that costs $45,000 if it is expected to generate $15,047 per year for five years?
Does the list of accepted projects change from part 2 : Rank the projects using the profitability index. Considering the limit on funds available, which projects should be accepted?
Explain complexity or difficult of genuinely getting to task : Try to find and briefly discuss one or more passages from this chapter (a couple of examples) that : best explains the priority or importance that Irigaray sees in this aim. best explain the complexity or difficult of genuinely getting to this task.
What do you like best about your peers synthesis : What do you like best about your peer's synthesis? Is it clear what is being synthesized? Is it always clear which source your peer is talking about at any given moment?
What is the third acceptable method : Which method most equitably allocates the costs to the various products?
What is the value of consumer surplus : The world price for this good is $40. For each answer show your work to get full credit. What is the value of consumer surplus (CS) in this closed economy? What is the value of total surplus (TS) in this closed economy

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the adjusted seasonal index for quarter one

What is the adjusted seasonal index for Quarter 1 Answer %? What is the centred moving average that would correspond to Quarter 1 in 2006?

  Evolution of the country monetary system

Analyze the evolution of the country's monetary system, including the impact of any fiscal monetary and trade policies. Describe the major components of the monetary system, including organizations and financial institutions.

  Pioneer agro is considering installing a new extractor and

pioneer agro is considering installing a new extractor and grinding machine which is expected to produce operating cash

  What is the dollar amount of cash flows

Capital Budgeting With Hedging. Baxter Co. considers a project with Thailand's government. If it accepts the project, it will definitely receive one lump sum cash flow of 10 million Thai baht in five years. The spot rate of the Thai baht is presently..

  Weaknesses of ratio analysis

Describe the weaknesses of ratio analysis.

  Determine the net cost of the call premium

Buchanan Corporation is refunding $12 million worth of 10% debt. The corporation's tax rate is 35%. The call premium is 9 percent.

  Lease a set of golf clubs from pings ltd

You want to lease a set of golf clubs from Pings Ltd. The lease contract is in the form of 36 equal monthly payments at a  stated annual interest rate of 9.2 percent, compounded monthly. Since the clubs cost $2,300 retail, Pings wants the PV of the l..

  Training at the newly open changi airport casino

Singapore's newly opened 3rd casino, CAC caters to the needs of travelers, tourists, and thrill-seekers on transit or holiday in Singapore.

  For 2012 everyday electronics reported 22 million of sales

for 2012 everyday electronics reported 22 million of sales and 19 million of operating costs including depreciation.

  J amp b corp is investing in a major capital budgeting

j amp b corp. is investing in a major capital budgeting project that will require the expenditure of 20 million. the

  If you put 200 in a savings account at the beginning of

if you put 200 in a savings account at the beginning of each year for 10 years and then allow the account to compound

  What compound annual rate of return must you earn

what function do i use on excel to solve: 12. You are 25 years old and inherit $65,000 from your grandmother. If you wish to purchase a $100,000 yacht to celebrate your 30th birthday, what compound annual rate of return must you earn?

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: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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