What are the projects true NPVs

Assignment Help Financial Management
Reference no: EM131583746

Cash flows for projects F and G are given below. Cash Flows ($) Project C0 C1 C2 C3 C4 C5 Etc. F –9,800 +6,800, +5,800, +4,800, 0, 0 ... G –9,800, +1,960, +1,960, +1,960, +1,960, +1,960, ... The cost of capital is assumed to be 10%. Assume the forecasted cash flows for projects of this type are typically overstated. That is, each $1 in forecasted cash flows for periods C1 and later should be reduced by 8 cents based on prior experience. But a lazy financial manager, unwilling to take the time to either argue with the project's sponsors or to adjust the cash flows, instructs the managers to use a discount rate of 18%.

a. What are the projects’ true NPVs? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

NPV Project F $ _________ Project G $________

b. What are the NPVs at the 18% discount rate? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

NPV Project F $ _________ Project G $___________

Reference no: EM131583746

Questions Cloud

What is the profit margin : The Sugar Shack reports net income of $150,000, sales of $1,500,000, and average assets of $730,000. What is the profit margin
Discuss business level strategies : Analyze the five business-level strategies discussed to determine which strategy the company you researched most likely applies
Episodic-fee-for-service and drg : Pick one of these and explain it, completely, including capitation, episodic, fee-For-Service, and DRG.
What is the portfolio standard deviation : What is the portfolio's standard deviation? What is the maximum one-month loss of the currency portfolio? State % and US dollars
What are the projects true NPVs : What are the projects’ true NPVs? What are the NPVs at the 18% discount rate?
Describe agile dimensional modeling and its benefits : The identification of candidate data source is essential to Agile data profiling. Discuss the concept involved in the process.
Communications to sell your personal data : Is it ethical for a company such as Facebook that provides a high level of "free" communications to sell your personal data to others.
Describe personality types of coworkers that cause conflicts : Describe personality types of coworkers that cause personality conflicts for you based on your own personality assessment.
Describe a work of art-abook : Describe a work of art-abook, a movie, a photgraph, a drawing, a painting, a song, or a musicial composition--that had a powerful impact on your life

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