Capital Rationing Suppose you are the financial manager of a firm considering the following five projects (expand below to see the five projects). Five Projects Under Construction Five Projects Under Consideration Project A Project B Project C Project D Project E Initial Investment -$100,000 -$150,000 -$140,000 -$60,000 -$1,500 Year 1 $50,000 $50,000 $60,000 $40,000 $1,000 Year 2 $40,000 $50,000 $40,000 $20,000 $250 Year 3 $20,000 $50,000 $35,000 $20,000 $100 Year 4 $10,000 $50,000 $25,000 $20,000 $100 Year 5 $50,000 $20,000 $100 Year 6 $20,000 $100 For this assignment: Calculate the Payback Period for each project. Calculate the NPV for each project, assuming a discount rate of 11.1%. Calculate the IRR for each project. Which projects should the firm implement based on your analysis If the projects are mutually exclusive? What if they are independent and $400,000 in capital funding is available?
Dividend Policy
A dividend is a part of the profit paid to the shareholder in an organization. The management of the organization has the right to decide the policy for giving a dividend from the earnings to the shareholder. However, an organization is not in the obligation to declare a dividend for the investor. Dividend policy differs from organization to organization. As the management has the only authority to decide dividend rate, dividend amount, and time of dividend payout by considering all other elements that create an impact on the payment of a dividend.
Stocks And Dividends
Stock or equities are generally sold and bought in the Stock Exchange or which is popularly known as the stock market. Stocks are issued in the Stock Exchange for the sole purpose of raising funds for the Corporation or the company itself. Now since an individual has purchased a portion of the Corporation or company, he or she may claim to be a part of the earnings or profit of the company.
Capital Rationing
Suppose you are the
Five Projects Under Construction
| Project A | Project B | Project C | Project D | Project E | |
|---|---|---|---|---|---|
| Initial Investment | -$100,000 | -$150,000 | -$140,000 | -$60,000 | -$1,500 |
| Year 1 | $50,000 | $50,000 | $60,000 | $40,000 | $1,000 |
| Year 2 | $40,000 | $50,000 | $40,000 | $20,000 | $250 |
| Year 3 | $20,000 | $50,000 | $35,000 | $20,000 | $100 |
| Year 4 | $10,000 | $50,000 | $25,000 | $20,000 | $100 |
| Year 5 | $50,000 | $20,000 | $100 | ||
| Year 6 | $20,000 | $100 |
For this assignment:
- Calculate the Payback Period for each project.
- Calculate the NPV for each project, assuming a discount rate of 11.1%.
- Calculate the
IRR for each project. - Which projects should the firm implement based on your analysis If the projects are mutually exclusive? What if they are independent and $400,000 in capital funding is available?
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- Which projects should the firm implement based on your analysis If the projects are mutually exclusive? What if they are independent and $400,000 in capital funding is available?
by Bartleby Expert- Which projects should the firm implement based on your analysis If the projects are mutually exclusive? What if they are independent and $400,000 in capital funding is available?
by Bartleby Expert
