Question
a. What is the selection algorithm that will always maximize financial return on available monies for...
a. What is the selection algorithm that will always maximize financial return on available monies for mutually exclusive projects? List all steps.
b. What is the selection algorithm that will always maximize financial return on available monies for independent projects? List all steps.
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Answer #1
answer.
.part b
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Both Projects A and B are acceptable as independent projects. However, the selection of either one...
Both Projects A and B are acceptable as independent projects.
However, the selection of either one of these projects eliminates
the option of selecting the other project. Which one of the
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All projects (A to G) are 7-year projects. NPV = Net present value. IRR = internal...
All projects (A to G) are 7-year projects. NPV = Net present
value. IRR = internal rate of return. MIRR = modified internal rate
of return. PI = profitability index.
Criteria:
Project_A
Project_B
Project_C
Project_D
Project_E
Project_F
Project_G
NPV=
$137,083
$31,290
$6,016
$7,647
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$12,521
$9,214
IRR=
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48.34%
12.03%
11.30%
9.94%
26.79%
37.87%
MIRR=
18.52%
23.52%
10.62%
10.59%
9.97%
23.53%
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PI=
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2.25
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1.038
1.00
2.25
1.92
The discounting rate...
All projects (A to G) are 7-year projects. NPV = Net present value. IRR = internal...
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value. IRR = internal rate of return. MIRR = modified internal rate
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Project B
Project C
Project D
Project E
Project F
Project G
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$4,711
($711)
($657)
$334
$9,842
$7,360
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5.47%
8.06%
12.98%
22.56%
17.19%
5.47%
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7.50%
8.97%
11.57%
16.26%
13.70%
7.50%
PI=
2.178
0.822
0.945
1.028
1.394
1.294
0.871
The discounting rate (r)...
All projects (A to G) are 7-year projects. NPV = Net present value. IRR = internal...
All projects (A to G) are 7-year projects. NPV = Net present
value. IRR = internal rate of return. MIRR = modified internal rate
of return. PI = profitability index.
Criteria:
Project_A
Project_B
Project_C
Project_D
Project_E
Project_F
Project_G
NPV=
$137,083
$31,290
$6,016
$7,647
($584)
$12,521
$9,214
IRR=
31.80%
48.34%
12.03%
11.30%
9.94%
26.79%
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MIRR=
18.52%
23.52%
10.62%
10.59%
9.97%
23.53%
20.76%
PI=
1.69
2.25
1.040
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0.999
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1.92
The discounting rate...
All projects (A to G) are 7-year projects. NPV = Net present value. IRR = internal...
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value. IRR = internal rate of return. MIRR = modified internal rate
of return. PI = profitability index.
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Project_A
Project_B
Project_C
Project_D
Project_E
Project_F
Project_G
NPV=
$137,083
$31,290
$6,016
$7,647
($584)
$12,521
$9,214
IRR=
31.80%
48.34%
12.03%
11.30%
9.94%
26.79%
37.87%
MIRR=
18.52%
23.52%
10.62%
10.59%
9.97%
23.53%
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2.25
1.040
1.038
0.999
2.25
1.92
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Question text Which of the following statements is INCORRECT? Select one: a. When choosing between mutually...
Question text
Which of the following statements is INCORRECT?
Select one:
a. When choosing between mutually exclusive projects, managers
should accept all projects with IRRs greater than the weighted
average cost of capital.
b. For independent projects, the decision to accept or reject
will always be the same using either the MIRR method or the NPV
method.
c. One of the disadvantages of choosing between mutually
exclusive projects on the basis of discounted payback method is
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Project
Annual Benefits
Annual Cost
A
$1,800,000
$2,000,000
B
5,600,000
4,200,000
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8,400,000
6,800,000
D
2,600,000
2,800,000
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FAVOR DE CALCULAR CONVENTONAL BENEFIT RATIO A TODOS Y ELIMINAR LOS
MENORES B/C DE (1)...
A) DO NOT calculate IRR for projects that are: Conventional Nonconventional Independent Mutually exclusive B) What...
A) DO NOT calculate IRR for projects that are:
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Nonconventional
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Year
Cash Flows
0
-1,000,000
1
300,000
2
300,000
3
300,000
4
600,000
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Year
Project
F
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0
−$180,000
-$280,000
1
93,600
64,800
2
64,800
86,400
3
81,600
123,600
4
72,000
166,800
5
64,800
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