Given: The company has set a goal of 25% Rate of Return on any of its investments. For the Existing System, Process A, Investment was equal to P5,600,000.00 and Operation Cost equals P 965,000.00. The company is contemplating on making an alternative Process B, where the Investment equals P7,000,000.00 and with a corresponding Operation Cost of only P325,000.00 Should the proposed alternative be adopted? O"No, since the difference in the relative costing between Process A (which is 965,000/5,600,000 = 17.23 %) and that of the costing for Alternative B (equal to 325,000/7,000,000= 4.6%) is only 12.63% and such 12.63 % is very much lower than the company target of 25 % O"Yes, since the ROI for Process B ia 45.50 %- O"No. Since the Revenues are not given, therefore the Net Cash Inflow or Income could not be determined O"Yes, since the ROI for Process B is 45.71 %*

Given: The company has set a goal of 25% Rate of Return on any of its investments. For the Existing System, Process A, Investment was equal to P5,600,000.00 and Operation Cost equals P 965,000.00. The company is contemplating on making an alternative Process B, where the Investment equals P7,000,000.00 and with a corresponding Operation Cost of only P325,000.00 Should the proposed alternative be adopted? O"No, since the difference in the relative costing between Process A (which is 965,000/5,600,000 = 17.23 %) and that of the costing for Alternative B (equal to 325,000/7,000,000= 4.6%) is only 12.63% and such 12.63 % is very much lower than the company target of 25 % O"Yes, since the ROI for Process B ia 45.50 %- O"No. Since the Revenues are not given, therefore the Net Cash Inflow or Income could not be determined O"Yes, since the ROI for Process B is 45.71 %*

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

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Please solve attached question normally, not using excel. thanks!
A company just paid $10 million for a feasibility study. If the company goes ahead with the project, it must immediately spend another $108,168,164 now, and then spend $20 million in one year. In two years it will receive $80 million, and in three years it will receive $90 million. If the cost of capital for the project is 11 percent, what is the project’s NPV? 10.6.1 nn

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