QS 24-8 (Algo) Net present value analysis, no calculations LO P3Net present values for three alternative investment projects follow.(a) If the company accepts all positive net present value Investments, which of these projects will it accept?(b) if the company can choose only one project, which will it choose?Potential Projects.Net present valueProject A$12,600Project B$17,500Project C$(3,600)(a) If the company accepts all positive net present value investments, which of these projects will it accept?(b) If the company can choose only one project, which will it choose?

A positive net present value (NPV) signifies the expectation of value addition from the investment,…

Answered: QS 24-8 (Algo) Net present value…

QS 24-8 (Algo) Net present value analysis, no calculat let present values for three alternative investment projects follow.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Two investments have the following pattern of expected returns: Investnent A Year 1 $5, 100 Year 2 $10,100 Year 3 Year 4 Year 4 (Sale) $121,000 STCF $12,100 $15,100 Investment B Year 1 $2,100 Year 2 $4,100 Year 3 $1,100 Year 4 Year 4 (Sale) $181,000 BTCF $5,100 Investment A requires an outlay of $111,000 and Investment B requires an outlay of $121,000. Required: a. What is the BTIRR on each investment? b. If the BTIRR were partitioned based on BTCF, and BTCF, what proportions of the BTIRR would be represented by each? c. Which investment would be preferable?
9.36 The fouT mutuzlly exclusive alternatives below are being compared using the B/C method. What altemative, if any, should be selected? Initial Investment, Incremental B/C When Compared With Altemative Altemative S Millions BC Ratio K L 20 0.40 --- 25 33 0.96 122 K 1.42 2.14 --- 0.72 0.80 0.08-- 45 0.39 I. Activate Winde PC settings to DFocus SAN FRACISCO.CA
Question 10 2 pts Which of the following statements is (or are) true? [Select all correct responses.] O For a borrowing (or "delayed investment" project), the internal rate of return (IRR) decision rule states that if the IRR exceeds the benchmark rate, accept the project. O For an investment, the IRR decision rule states that if the IRR exceeds the benchmark rate, accept the project. O NPV should never be used if the project under consideration has nonconventional cash flows. D A decision maker who is considering several mutually exclusive investment opportunities should use IRR to choose the best one among them. O The payback investment rule might not use all possible cash flows in its calculation. O In some instances, for example for mutually exclusive investments, the NPV rule is not as conceptually legitimate as is the payback rule. Practitioners generally prefer the payback decision criterion to the IRR because payback considers the time value of money while IRR does not. The…
Novell, Inc., has the following mutually exclusive projects. Year Project A Project B 0 $27,000 $30,000 1 15,500 2 12,000 3 3,600 16,500 10,500 12,000 a-1. Calculate the payback period for each project. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Project A Project B 1.958 years 2.250 years a-2. If the company's payback period is two years, which, if either, of these projects should be chosen? Project A Project B
please give me answer dont give answer in image format
Exercise 14-7 (Algo) Net Present Value Analysis of Two Alternatives [LO14-2] Perit Industries has $110,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: Cost of equipment required Working capital investment required Annual cash inflows Salvage value of equipment in six years Life of the project Project A $ 110,000 $0 $ 20,000 $ 8,600 1. Net present value project A 2. Net present value project B 3. Which investment alternative (if either) would you recommend that the company accept? 6 years Project B $0 $ 110,000 $ 68,000 $0 6 years The working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries' discount rate is 16%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value of Project A. (Enter negative values with a minus sign. Round your final answer to the nearest…
13 Which of the following would not be expected to affect the decision of whether to undertake an investment? A. Sales reductions in other products caused by this investment B. Income tax rates C₁ Estimates of inflation rates D Cost of the feasibility study that was conducted for this project OA O B O C OD
Opportunity Cost In the context of capital budgeting, what is an NG AND CONCEPTS REVIEW 9.2 Depreciation Gjyen the choice would a firm prefer to use MACRS 9.1 opportunity cost?