Cash Flow ($000s) for End of Year k PW ($000s) at Project 1 2 3 MARR = 10% per year B1 - 50 20 20 20 20 13.4 B2 -30 12 12 12 12 8.0 CI -14 4 4 4 4 -1.3 C2 -15 5 5 5 5 0.9 D -10 6. 6. 9.0 4.
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.
Five engineering projects are being considered for the upcoming capital budget period. The interrelationships among the projects and the estimated net cash flows of the projects are summarized in the following table: Projects B1 and B2 are mutually exclusive. Projects C1 and C2 are mutually exclusive and dependent on the acceptance of B2. Finally, project D is dependent on the acceptance of C1. Using the PW method, and assuming that MARR = 10% per year, determine which combination (portfolio) of projects is best if the availability of capital is limited to $48,000.
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