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Abercrombie & Fitch.
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Abercrombie & Fitch.
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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 for Hanmi. Assume the discount rate for Hanmi is 11 percent. Further, Hanmi Group has only $23 million to invest in new projects this year. |
| Cash Flows (in $ millions) |
| Year | CDMA | Â Â G4 | Wi-Fi | ||||||
| 0 | A????1$ | 5 | Â | A????1$ | 18 | Â | A????1$ | 23 | Â |
| 1 | Â | 9 | Â | Â | 16 | Â | Â | 21 | Â |
| 2 | Â | 5.5 | Â | Â | 31 | Â | Â | 35 | Â |
| 3 | Â | 2.5 | Â | Â | 23 | Â | Â | 23 | Â |
| a. |
Calculate the profitability index for each investment. (Do not round intermediate calculations and round your answers to 2 decimal places. (e.g., 32.16)) |
| Â | Profitability index |
| Â Â CDMA | Â Â |
| Â Â G4 | Â Â |
| Â Â Wi-Fi | Â Â |
| b. |
Calculate the NPV for each investment. (Enter your answers in dollars, not millions of dollars, i.e. 1,234,567. Do not round intermediate calculations and round your answers to 2 decimal places. (e.g., 32.16)) |
| Â | NPV |
| Â Â CDMA | $Â Â Â |
| Â Â G4 | $Â Â Â |
| Â Â Wi-Fi | $Â Â Â |
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