Question
A firm can invest Rs.5,00,000 in maximum 2 of the following projects. Use Discounted Payback criteria...
A firm can invest Rs.5,00,000 in maximum 2 of the following projects. Use Discounted Payback criteria and another most suitable criteria (justify the choice in two lines) to choose the best two. Your firm's WACOC is 15% p.a.
|
Project |
0 |
1 |
2 |
3 |
4 |
|
A |
-2,50,000 |
0 |
0 |
+1,30,000 |
+ 1,80,000 |
|
B |
-2,50,000 |
+1,30,000 |
+1,80,000 |
0 |
0 |
|
C |
-1,90,000 |
+ 30,000 |
+ 40,000 |
+ 80,000 |
+ 1,00,000 |
Homework Answers
Answer #1
Not the answer you're looking for?
Similar Questions
Timeline Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or...
Timeline Manufacturing Co. is evaluating two projects. The
company uses payback criteria of three years or less. Project A has
a cost of $845,140, and project B’s cost is $1,190,400. Cash flows
from both projects are given in the following table.
Year
Project A
Project B
1
$86,212
$586,212
2
313,562
413,277
3
427,594
231,199
4
285,552
What are their discounted payback periods? (Round
answers to 2 decimal places, e.g. 15.25. If discounted payback
period exceeds life of the project,...
Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below....
Suppose your firm is considering two mutually exclusive,
required projects with the cash flows shown below. The required
rate of return on projects of both of their risk class is 8
percent, and that the maximum allowable payback and discounted
payback statistic for the projects are 2 and 3 years,
respectively.
Time:
0
1
2
3
Project A Cash Flow
-30,000
20,000
40,000
11,000
Project B Cash Flow
-40,000
20,000
30,000
60,000
Use the NPV decision rule to evaluate these...
Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as...
Suppose your firm is considering two mutually exclusive,
required projects with the cash flows shown as follows. The
required rate of return on projects of both of their risk class is
8 percent, and the maximum allowable payback and discounted payback
statistic for the projects are two and three years,
respectively.
Time
0
1
2
3
Project A Cashflow
-20,000
10,000
30,000
1,000
Project B Cashflow
-30,000
10,000
20,000
50,000
Calculate the NPV and use the NPV decision rule to...
Shell Camping Gear, Inc., is considering two mutually exclusive projects. Each requires an initial investment of...
Shell Camping Gear, Inc., is considering two mutually
exclusive projects. Each requires an initial investment of
$140,000. John Shell, president of the company, has set a
maximum payback period of 4 years. The after-tax cash inflows
associated with each project are shown in the following
table:
1 20,000 50,000
2 30,000 40,000
3 40,000 30,000
4 50,000 20,000
5 30,000 30,000
a. Determine the payback period of each project.
b. Because they are mutually exclusive, Shell must choose one.
Which...
1. Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown...
1.
Suppose your firm is considering two mutually exclusive, required
projects with the cash flows shown as follows. The required rate of
return on projects of both of their risk class is 8 percent, and
the maximum allowable payback and discounted payback statistic for
the projects are two and three years, respectively.
Time
0
1
2
3
Project A Cash Flow
?20,000
10,000
30,000
1,000
Project B Cash Flow
?30,000
10,000
20,000
50,000
Use the MIRR decision rule to evaluate...
Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below....
Suppose your firm is considering two mutually exclusive,
required projects with the cash flows shown below. The required
rate of return on projects of both of their risk class is 9
percent, and that the maximum allowable payback and discounted
payback statistic for the projects are 2 and 3 years,
respectively.
Time:
0
1
2
3
Project A Cash Flow
-21,000
11,000
31,000
2,000
Project B Cash Flow
-31,000
11,000
21,000
51,000
Use the NPV decision rule to evaluate these...
CAPITAL BUDGETING CRITERIA A firm with a 14% WACC is evaluating two projects for this year's...
CAPITAL BUDGETING CRITERIA
A firm with a 14% WACC is evaluating two projects for this
year's capital budget. After-tax cash flows, including
depreciation, are as follows:
0
1
2
3
4
5
Project M
-$18,000
$6,000
$6,000
$6,000
$6,000
$6,000
Project N
-$54,000
$16,800
$16,800
$16,800
$16,800
$16,800
Calculate NPV for each project. Round your answers to the
nearest cent. Do not round your intermediate calculations.
Project M $
Project N $
Calculate IRR for each project. Round your answers to two...
CAPITAL BUDGETING CRITERIA A firm with a 13% WACC is evaluating two projects for this year's...
CAPITAL BUDGETING CRITERIA
A firm with a 13% WACC is evaluating two projects for this
year's capital budget. After-tax cash flows, including
depreciation, are as follows:
0
1
2
3
4
5
Project M
-$27,000
$9,000
$9,000
$9,000
$9,000
$9,000
Project N
-$81,000
$25,200
$25,200
$25,200
$25,200
$25,200
Calculate NPV for each project. Round your answers to the
nearest cent. Do not round your intermediate calculations.
Project M $
Project N $
Calculate IRR for each project. Round your answers to two...
Part 2. Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B)...
Part 2. Consider the following two
mutually exclusive projects:
Year
Cash Flow (A)
Cash Flow (B)
0
- $ 300,000
- $40,000
1
20,000
19,000
2
50,000
12,000
3
50,000
18,000
4
390,000
10,500
Whichever project you choose, if any, you require a 15 percent
return on your investment.
a. If you apply the payback criterion, which
investment will you choose? Why?
b. If you apply the discounted payback
criterion, which investment will you choose? Why?
c. If...
Your firm is considering two projects with the following cash flows. WACC 6% 6% year...
Your
firm is considering two projects with the following cash
flows.
WACC
6%
6%
year
Project A
Project B
0
-55,000
-70,000
1
10,000
10,000
2
9,000
10,000
3
8,000
10,000
4
7,500
10,000
5
7,500
10,000
6
7,500
10,000
7
7,500
10,000
8
7,500
12,000
a. Calculate NPV and IRR for
both projects
NPV
IRR
b. Do the
following 2...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 21 minutes ago
asked 35 minutes ago
asked 41 minutes ago
asked 43 minutes ago
asked 47 minutes ago
asked 48 minutes ago
asked 54 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago