Homework Helper

Not Rated (0)

$17/per page/

About Homework Helper

Levels Tought:
Elementary,Middle School,High School,College,University,PHD

Expertise:
Accounting,Applied Sciences See all
Accounting,Applied Sciences,Art & Design,Chemistry,Economics,Essay writing Hide all
Teaching Since: Apr 2017
Last Sign in: 419 Weeks Ago
Questions Answered: 3232
Tutorials Posted: 3232

Education

  • MBA,MCS,M.phil
    Devry University
    Jan-2008 - Jan-2011

  • MBA,MCS,M.Phil
    Devry University
    Feb-2000 - Jan-2004

Experience

  • Regional Manager
    Abercrombie & Fitch.
    Mar-2005 - Nov-2010

  • Regional Manager
    Abercrombie & Fitch.
    Jan-2005 - Jan-2008

Category > Business & Finance Posted 26 May 2017 My Price 8.00

1) A firm evaluates all of its projects by applying

1)

A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows:

 

Year Cash Flow
0 "?o$ 29,000  
1   13,000  
2   16,000  
3   12,000  

 

What is the NPV for the project if the required return is 12 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

 

NPV $

 

At a required return of 12 percent, should the firm accept this project?
 
  Yes
  No

 

What is the NPV for the project if the required return is 24 percent? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

 

NPV $

 

At a required return of 24 percent, should the firm accept this project?
 
  Yes
  No


2)
Garage, Inc., has identified the following two mutually exclusive projects:
Year Cash Flow (A)   Cash Flow (B)
0 "?o$ 29,500     "?o$ 29,500  
1   14,900       4,550  
2   12,800       10,050  
3   9,450       15,700  
4   5,350       17,300  
a-1

What is the IRR for each of these projects? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

  IRR
Project A %
Project B %

a-2

Using the IRR decision rule, which project should the company accept?
   
 
  Project A
  Project B

a-3 Is this decision necessarily correct?
   
 
  Yes
  No

b-1

If the required return is 10 percent, what is the NPV for each of these projects? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))
  NPV
Project A $
Project B $

b-2 Which project will the company choose if it applies the NPV decision rule?
   
 
  Project A
  Project B
c.

At what discount rate would the company be indifferent between these two projects? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Discount rate %

Answers

Homework Helper
Not Rated (0)
Status NEW Posted 26 May 2017 05:05 PM My Price 8.00

Hel-----------lo -----------Sir-----------/Ma-----------dam----------- T-----------han-----------k Y-----------ou -----------for----------- us-----------ing----------- ou-----------r w-----------ebs-----------ite----------- an-----------d a-----------cqu-----------isi-----------tio-----------n o-----------f m-----------y p-----------ost-----------ed -----------sol-----------uti-----------on.----------- Pl-----------eas-----------e p-----------ing----------- me----------- on----------- ch-----------at -----------I a-----------m o-----------nli-----------ne -----------or -----------inb-----------ox -----------me -----------a m-----------ess-----------age----------- I -----------wil-----------l

Not Rated(0)