5. Your company has $100 million available for investment in the followingpotential investment opportunities:Project NPVInitial Investment$5 million$15 million$15 million$50 million$10 million$10 million$20 million$60 millionE$12 million$35 millionRank the projects based on profitability and identify the projects thatshould be accepted keeping in view the company's capital budgetconstraints.ABCD

The question presented revolves around the essential concept of capital budgeting, which is a…

Answered: 5. Your company has $100 million…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Management wants to explore the total profit using What If analysis with the data below. Fixed Cost = $10,000 Material cost per toy = $0.15 Labor cost per toy = $0.10 Vary the Revenue per toy from 0.60 to 1.10 by 0.05, and the labor cost from 0.08 to 0.16 by 0.01 When the quantity sold is 27,000 toys, what is the range of profits when the sales price is $$0.70? - $1,090 to $1,340 $260 to $2,690 $1,610 to $4,040 $2,960 to $5,390 $530 to $2,960
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Text: We can develop the CSR activities for Nestle company of planting trees and cleaning the lakes. This can be done by partnering with NGOs who are already working in these areas. The company can target several trees to be planted, for example, 100,000 in a quarter and take care of them till growth. To clean the lake, it can take the help of the National scientist of environmental science and fund the project to clean some of the lakes with the target number of again 50. A long-term solution must be used by them in cleaning the lakes, like stopping the sewage inflow and creating a small recycling plant before throwing water into the water bodies. The government, municipality, NGO, and environmental scientists are the main stakeholders involved. Here, the competition must not be created, but collaboration was be done between the competitors to help the society. The competitors will be other brands like Unilever and P&G. Progress indicators can be used as the number of trees…
Suppose you have a choice of three projects to choose from. Here the expected profits from these projects under the following economic scenarios: Project Poor/Fair Moderate/Stable Strong/Booming A -200 $400 $700 B -700 600 1200 C 100 500 900 Now suppose the probability of a Poor/Fair economy is 25%, a Moderate/Stableeconomy is 45% and there is a 30% chance for a Strong/Booming economy.A) Setup a decision tree.B) Determine the expected value (EV) for each project. What project shouldbe selected based on the expected value approach? Why?C) Determine the expected value with perfect information about the states ofnature?D) Determine the expected value without perfect information about the states ofnature?E) Determine the expected value of perfect information.
You are the Project Analyst for Nairobi Project Advisors who have been asked by a client to advise on which of the following two projects should be accepted. Each project costs US$ 10,000 and each entails a 12% cost of capital: Year Expected Net Cash flows Project X Project Y 0 ($ 10,000) ($ 10,000) 1 6,500 3,500 2 3,000 3,500 3 3,000 3,500 4 1,000 3,500 a) Advise on which project should be undertaken using the Pay Back Period (PBP), Net Present Value (NPV), Internal Rate of Return (IRR), and Modified Internal Rate of Return (MIRR) assuming: i. The projects are independent ii. The projects are mutually exclusive
6

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