Project

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Reference no: EM13352115

Project                 Initial Investment               Annual Earnings

w                            $800,000                                 $90,000

x                             100,000                                     20,000

y                             300,000                                     25,000

z                             400,000                                      60,000

Required:

a. If the investment manager is recently making a return on investment of 16 %, which project(s) would the manager want to pursue?

b. If the cost of capital is 10 % and the annual earnings estimated cash flows excluding finance charges, which projects should be chosen?

c. Consider only one project will be chosen and the annual earnings approximate cash flows excluding finance charges. Which project should be selected?

Reference no: EM13352115

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