Consider that you are evaluting the following projects to undertake as per your capital budgeting activity You have capital budget constarin of 10,000. Project #3 and Project#4 are mutually exclusive. You have extimated your WACC as 12%.
Consider that you are evaluting the following projects to undertake as per your capital budgeting activity You have capital budget constarin of 10,000. Project #3 and Project#4 are mutually exclusive. You have extimated your WACC as 12%.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
100%
Consider that you are evaluting the following projects to undertake as per your capital budgeting activity You have capital budget constarin of 10,000. Project #3 and Project#4 are mutually exclusive. You have extimated your WACC as 12%.
Transcribed Image Text:Show your calculations below and answer
Capita Budgeting Criteria
Project
#1
#2
#3
#4
Step 1 (Answer)
Step 2 (Answer)
Rank #
Project #
Step 3 (Answer)
NPV
1
Reason for Ranking the projects/ Assumptions (if any)
IRR
2
MIRR
Discounted Payback Period
4
Profitability Index
Anyother criteria(s)
Transcribed Image Text:Project
#1
#2
#3
#4
Initial Investment
-5000
-5000
-5000
-5000
Year
1
2000
300
-750
2
1253.55
4500
-300
3
2000
1500
3000
4
2000
450
1800
350
500
6.
5500
7
8
10
17018.93
Sum of the Cash flows
7253.55
17018.93
7100.00 9750.00
Excess Cash Flows
2253.55
12018.93
2100.00 4750.00
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education