Given the current economic conditions in canada discuss any

Assignment Help Accounting Basics
Reference no: EM13581033

A company is considering three separate, mutually exclusive projects A, B, and C. Project A requires a $10,000 cash outlay (outflow) today and is expected to generate after-tax cash flows of $7,000 in year 1 and $6,000 in year 2. Project B requires an $8,500 cash outlay today and is expected to generate after-tax cash flows of $4,000 in year 1 and $7,000 in year 2. Project C requires a $10,600 cash outlay today and is expected to generate after-tax cash flows of $5,000 for each of the next 3 years. Assume that 15% is the appropriate discount rate to perform this exercise.

Deliverables:

a.   Calculate the NPV for all 3 projects.
b.   If a capital budget constraint of $20,000 is placed on new investments, determine which project(s) should be selected and why?
c.   What is the loss to the company from the capital rationing constraint you have applied tin "b"
d.  Given the current economic conditions in Canada, discuss any options that the organization can execute to perform all projects that have positive NPV.

Reference no: EM13581033

Questions Cloud

It costs lannon fields 28 of variable costs and 12 of : it costs lannon fields 28 of variable costs and 12 of allocated fixed costs to produce an industrial trash can that
Kolinchak inc expects its gross payroll for the period to : kolinchak inc. expects its gross payroll for the period to be 100000. it expects to withhold 7.65 of gross payroll for
Griffin corp is evaluating its piquette division an : griffin corp. is evaluating its piquette division an investment center. the division has a 60000 controllable margin
Barton corporation has provided the budgeting information : barton corporation has provided the budgeting information for you to determine its expected bonus payments. bartons
Given the current economic conditions in canada discuss any : a company is considering three separate mutually exclusive projects a b and c. project a requires a 10000 cash outlay
Kolinchak companys expected gross payroll for the period : kolinchak companys expected gross payroll for the period is 300000. assuming that its fica rate is 7.65 its futa rate
Dreary days inc sells raincoats at a selling price of 2500 : dreary days inc. sells raincoats at a selling price of 25.00 for each raincoat. the variable cost per raincoat is
Agazzi company purchased equipment for 384600 on october 1 : agazzi company purchased equipment for 384600 on october 1 2012. it is estimated that the equipment will have a useful
Lockard company purchased machinery on january 1 2012 for : lockard company purchased machinery on january 1 2012 for 138560. the machinery is estimated to have a salvage value of

Reviews

Write a Review

Accounting Basics Questions & Answers

  At the acquisition date sams total fair value including the

father inc. buys 80 percent of the outstanding common stock of sam corporation on january 1 2013 for 760960 cash. at

  The required volume of output to produce the motors will

green company uses part jr3 in manufacturing its products. it has always purchased this from a supplier for 40 each. it

  Record the issuance of the bonds amortization using the

on april 1st the tjd company issued 72000 10 10-year bonds dated 11 at 98 plus accrued interest. interest paid semi

  Journalize the entries and record the summarized operations

Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as dates. Insert memo account balances as of the end of the month.

  Prepare statement of changes in stockholder equity

Prepare an income statement, statement of changes in stockholder equity, period-end balance sheet, and statement of cashflows for the 2002 accoutning period.

  Why are bank reconcilations so important

During the preparation of the bank reconciliation for New Concepts Co., Peter Fikes, the assistant controller, discovered that City National Bank incorrectly recorded a $710 check written by New Concepts Co. as $170.

  Procter amp gamble and wal-mart are key partners in a

procter amp gamble and wal-mart are key partners in a shared channel. pampg is one of wal-marts biggest suppliers and

  Consolidated balance sheet prepared after combination

Wilton held land with a book value of $50,000 and fair value of $600,000. Using the parent company theory, at what amount would land be reported in a consolidated balance sheet prepared immediately after the combination?

  Section of statement of cash flows under direct-indirect

In each case, compute the amount that should be reported in the operating activities section of the statement of cash flows under the direct and indirect method.

  Should the company accept or reject the offer

Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $13 per unit (Normal value? Additional value? Combined value?)

  Vango inc sells part number 86z to auto parts stores around

1.vango inc. sells part number 86z to auto parts stores around the world. information about part number 86z is

  Determine annual manufacturing overhead cost-allocation rate

a. For Fox Manufacturing, determine the annual manufacturing overhead cost-allocation rate. b. Determine the amount of manufacturing overhead costs allocated to the Maize High School job.

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