Ms. Marielle Bragado is currently having a hard time reviewing the project proposals sent to her by her executive secretary. Projects A, B, C, D and E were all submitted together with the capital budgeting analysis results. Secretary: Hi Ma’am! Here is the summary of the capital budgeting analysis done by our Finance Lead. The five projects were all presented and marked if accepted or rejected based on the capital budgeting technique used. Ms. Marielle: This really causes me headache. Why is it that only Projects A and E are accepted if the profitability index and net present value index will be used in deciding? Projects B, C and D all have more than 1.0 indices as well but why? Secretary: I also don’t know ma’am, but he is saying something about resource allocation. I think that would give you a hint. Ms. Marielle: I know, and assuming that all of these projects can be accepted, the company will be more than willing to invest in all these projects. I just don’t know why the other projects were recommended to be rejected already. Required: Assuming that you are the Finance Lead, what factor/s will cause you to accept/reject projects even if they are all deemed acceptable? Explain.
Ms. Marielle Bragado is currently having a hard time reviewing the project proposals sent to her by her executive secretary. Projects A, B, C, D and E were all submitted together with the capital budgeting analysis results. Secretary: Hi Ma’am! Here is the summary of the capital budgeting analysis done by our Finance Lead. The five projects were all presented and marked if accepted or rejected based on the capital budgeting technique used. Ms. Marielle: This really causes me headache. Why is it that only Projects A and E are accepted if the profitability index and net present value index will be used in deciding? Projects B, C and D all have more than 1.0 indices as well but why? Secretary: I also don’t know ma’am, but he is saying something about resource allocation. I think that would give you a hint. Ms. Marielle: I know, and assuming that all of these projects can be accepted, the company will be more than willing to invest in all these projects. I just don’t know why the other projects were recommended to be rejected already. Required: Assuming that you are the Finance Lead, what factor/s will cause you to accept/reject projects even if they are all deemed acceptable? Explain.
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
Ms. Marielle Bragado is currently having a hard time reviewing the project proposals sent to her by her executive secretary. Projects A, B, C, D and E were all submitted together with the capital budgeting analysis results.
Secretary: Hi Ma’am! Here is the summary of the capital budgeting analysis done by our Finance Lead. The five projects were all presented and marked if accepted or rejected based on the capital budgeting technique used.
Ms. Marielle: This really causes me headache. Why is it that only Projects A and E are accepted if the profitability index and net present value index will be used in deciding? Projects B, C and D all have more than 1.0 indices as well but why?
Secretary: I also don’t know ma’am, but he is saying something about resource allocation. I think that would give you a hint.
Ms. Marielle: I know, and assuming that all of these projects can be accepted, the company will be more than willing to invest in all these projects. I just don’t know why the other projects were recommended to be rejected already.
Required: Assuming that you are the Finance Lead, what factor/s will cause you to accept/reject projects even if they are all deemed acceptable? Explain.
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 2 steps
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