A firm whose cost of capital is 10% is considering two mutually exclusive projects X and Y, the details of which are: Year Project X Project Y Cost Rs. 70,000 Rs. 70,000 Cash Inflows 1 Rs. 10,000 Rs. 50,000 Rs. 20,000 Rs. 40,000 3 Rs. 30,000 Rs. 20,000 4 Rs. 45,000 Rs. 10,000 5 Rs. 60,000 Rs. 10,000 Compute the Net Present Value at 10%, Profitability Index, and Internal Rate of Return of the two projects. 2.

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A: To evaluate the two projects, we will calculate the Net Present Value (NPV) and the discounted…

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A: Here, To Find: Profitability Index (PI) and ranking =?

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A: Payback Period : Payback period is defined as the number of years required to recover the original…

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A: Initial Cost = $1000 WACC = r = 10%

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A: IRR is the rate at which NPV is zero

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A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

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Q: Your division is considering two projects with the following cash flows and a WACC of 7.90%. Year 0…

A: YearProject AProject B0 $(100,000.00) $(100,000.00)1 $   30,000.00 $   50,000.002 $   40,000.00 $…

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A: The answer is (d) 26.04%.Here's why:IRR (Internal Rate of Return) helps us determine the project's…

Q: A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 1 3…

A: Year Project S Project L 0 -1000 -1000 1 871.53 0 2 260 260 3 10 400 4 10 766.36

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A: We will compute the NPV of the two projects. The better project is the one with the higher NPV.

Q: You must analyze two projects, X and Y. Each project costs $1,000, and the firm’s WACC is 10%. The…

A: Initial cost = $1000 WACC = r = 10% Cash flow for years 1 = cf1 = $500 Cash flow for years 2 = cf2 =…

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A: IRR is also known as Internal rate of Return. It is a capital budgeting technique which helps in…

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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.