Hanmi Group a consumer electronics conglomerate, is reviewing its annual budget in wireless technology. It is considering investments in three different technologies to develop wireless communication devices. Consider the following cash flows of the three independent projects available to the company. Assume the discount rate for all projects is 12 percent. Further, the company has only $26 million to invest in new projects this year.
a. Calculate the profitability index for each investment.
b. Calculate the NPV for each investment
Cash Flows In Millions |
|||
YEAR |
CDMA |
G4 |
WIFI |
0 |
9 |
17 |
26 |
1 |
14 |
14 |
23 |
2 |
11.5 |
28 |
39 |
3 |
6.5 |
26 |
26 |
a |
CDMA |
|
G-4 |
||
WI-FI |
||
b |
CDMA |
|
G-4 |
||
WI-FI |
Get Answers For Free
Most questions answered within 1 hours.