A firm has only $10,000 to invest and must choose between two projects. Project A returns $12,400 after a year while project B pays $15,609 after three years. If management wants to select the investment with the higher return, which alternative should be chosen?

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A: Net present value is difference between present value of cash flow and initial investment.

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A: Net Present Value (NPV) :— It is the sum of present value of all cash flows. It is also calculated…

Q: which should you

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Q: whether Alpha, Beta, and/or Gamma should be eliminated because the average rate of return of their…

A: Average rate of return = Estimated average annual income/average investment Average investment =…

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A: First, we need to calculate the cash flows for each year. The cash flow for a year can be calculated…

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Q: please step by step solution.

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Q: our firm is cons

A: The average accounting return can be calculated as follows : Results obtained :

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Q: A project Alpha requires an initial capital outlay of $300,000. Its profitability index is 0.18 .…

A: Initial Outlay = i = $300,000Profitability Index = pi = 0.18

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Q: Should the project be rejected and why?

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A:

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Q: What is the project's expected NPV?

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A: Rate of return:The “rate of return” is a crucial financial metric that represents the gain or loss…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.