Rate of return for evaluating the project

Assignment Help Financial Management
Reference no: EM133305419

Question

If IBM decides to undertake a new project, will it be advisable to use its WACC as the required rate of return for evaluating the project? If yes, explain why? If no, explain why? Make sure to explain using both scenarios of the new project being (i) more risky or (ii) less risky than the firms' current projects. (assume the WACC is 11.47%)

Reference no: EM133305419

Questions Cloud

Debt to equity ratio and cashflow from operations : How could they improve their debt to equity ratio and their cashflow from operations?
Design and application of hedges : Use an internal analysis tool - Explain in detail the design and application of hedges.
What is the hedge ratio for the micro hedge : Your company president is concerned about effect of interest-rate changes on rate-sensitive assets and liabilities. What is the hedge ratio for the micro hedge?
Expected changes to company earnings per share : Advise Michele on the expected changes to the company's earnings per share and P/E ratio after the rights issue.
Rate of return for evaluating the project : If IBM decides to undertake a new project, will it be advisable to use its WACC as the required rate of return for evaluating the project?
What would be your portfolio risk : If the correlation between the two stocks is +1, 0.5 and -1, respectively, what would be your portfolio's risk?
Diligence in terms of research : Businesses that do not do their due diligence in terms of research when entering a new marketplace,
Parameters linter model of dividend policy : EXPLAIN the parameters Linter's model of dividend policy. Also explain the reasons of its criticism.
Attractive targets for foreign private equity companies : Why the UK businesses are attractive targets for foreign private equity companies and how they (PE companies) might potentially benefit from such deals

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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