Question consider the following potential investment which

Assignment Help Managerial Accounting
Reference no: EM13376874

Question

Consider the following potential investment, which has the same risk as the firm's other projects:

Time

Cash Flow

0

-$95,000

1

$20,000

2

$24,000

3

$24,000

4

$24,000

5

$24,000

6

$32,000

 a) What are the investment's payback period, IRR, and NPV, assuming the firm's WACC is 8%.

b) If the firm requires a payback period of less than 5 years, should this project be accepted? Be sure to justify your choice.

c) Based on the IRR and NPV rules, should this project be accepted? Be sure to justify your choice.

d) Which of the decision rules (payback, NPV, or IRR) do you think is the best rule for a firm to use when evaluating projects? Be sure to justify your choice.

Reference no: EM13376874

Questions Cloud

This unit describes the performance outcomes skills and : this unit describes the performance outcomes skills and knowledge required to conduct individual and group instruction
Question 1 andy has run a small corner store as a sole : question 1. andy has run a small corner store as a sole trader for many years.however his adult children pester him to
Question your company is interested in having a new : question your company is interested in having a new facility constructed. the contractor expects that it will take
Questiona firm believes it can generate an additional : questiona firm believes it can generate an additional 250000 per year in revenues for the next 5 years if it replaces
Question consider the following potential investment which : question consider the following potential investment which has the same risk as the firms other projectstimecash
Not-for-profit hospital financial statement analysisexamine : not-for-profit hospital financial statement analysis.examine the financial statements for oak valley hospital for the
During 2011 the following selected events and transactions : during 2011 the following selected events and transactions were recorded by nichols county hospital.1.gross charges for
Public university transactions the statement of net assets : public university transactions. the statement of net assets of green tree state university a governmentally owned
Private college transactions elizabeth college a small : private college transactions. elizabeth college a small private college had the following transactions in fiscal year

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Accounting-management control systems

Jack's Outdoor World is the company which manufactures and sells garden furniture. They've been operating for past ten years and have the comfortable share of market.

  The major task that you need to complete in this subject is

the major task that you need to complete in this subject is the preparation of a report which provides an assessment of

  Variance analysis to explain causes of increase in revenue

Use variance analysis to explain the causes of the increase in revenue from 2007 to 2008. Show your computations neatly, and clearly label the appropriate variances.

  What would be the total cost to be accounted

During the month, the cost of units transferred out from the department was $410,000. In the department's cost reconciliation report for February, the total cost to be accounted for would be.

  Why does management accounting provide information

why does management accounting provide information to the internal users only?

  Cost allocation for airlines

Identify the direct and indirect costs that Jarmon incurs for each trip. Determine the total cost of each trip. In addition to depreciation, identify three other indirect costs that may need to be allocated to determine the cost of each trip.

  Should the division outsource its ceramic pots

Suppose the division has the opportunity to purchase the ceramic pot from another manufacturer for $60. The supplier is willing to hold sufficient inventories to meet Evergreen's demand. Should the division outsource its ceramic pots? Why or why n..

  Process cost system and cost transferred

Company uses a process cost system. The company started march with 2,300 units in work in process-department A. During the month 4,000 units were started. At the end of the month there were 3,200 units in ending work in process-dept.

  Advertising budget

Suppose you're a field marketing professional, responsible for marketing your company's products in South Florida region of medium-size corporation. One day you receive the CD from your corporate marketing group (based in Detroit, Michigan) which ..

  Analysing a service contract using simulation

What is the probability that there will be 4 claims or fewer per day and analysing a service contract using simulation

  Relevant cost of materials

What would be the relevant cost of the materials, in total, for purposes of determining a minimum acceptable price for the order for product GEE?

  Direct manufacturing labour cost budget

Production budget in units and direct material usage budget and direct material purchases budget, direct manufacturing labour cost budget

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