Question 1: Salalalh Methanol company management is considering three competinginvestment Projects A, B & CYearInitial Investment12Project A Project B120004150Project C1200012000522582501200310038004600Assume a discount Rate of 5.45 %526073609460927593004Use the information above and help the management in choosing the most desirableProject using Payback period, Discounted payback Net Present value andProfitability Index. Out of the four methods which is considered to be the mostdesirable. Explain

Profitability Index = PV of future cashflows/ Initial Investment

Question 1: Salalalh Methanol company management is considering three competing investment Projects A, B & C Year Initial Investment Project A 12000 1200 3100 3800 4600 Project B 12000 4150 5260 7360 Project C 12000 5225 8250 9275 9300 2 3 4 Assume a discount Rate of 5.45 % 9460 Use the information above and help the management in choosing the most desirable Project using Payback period, Discounted payback Net Present value and Profitability Index. Out of the four methods which is considered to be the most desirable. Explain

Question 1: Salalalh Methanol company management is considering three competing investment Projects A, B & C Year Initial Investment Project A 12000 1200 3100 3800 4600 Project B 12000 4150 5260 7360 Project C 12000 5225 8250 9275 9300 2 3 4 Assume a discount Rate of 5.45 % 9460 Use the information above and help the management in choosing the most desirable Project using Payback period, Discounted payback Net Present value and Profitability Index. Out of the four methods which is considered to be the most desirable. 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

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Subject: acounting
Question 1 Davidsons Incorporated is using Payback Period and Net Present Value (NPV) methods for investment decision making for small projects. The cut-off period will remain at 3 years. The net after tax cash flows of the projects are as follows: Cash Flows Initial Cost Year 1 Year 2 Year 3 Required: Project 1 £11,000 £5,000 £5,000 £5,000 Project 2 £20,000 £7,000 £5,500 £4,000 Project 3 £8,000 b) Explain the uses, limitations, and merits of the Payback Period compared to Net Present Value in investment appraisal. £3,000 £3,500 £4,000 a) Calculate the NPV of each project at 9% discount rate. Given the above four projects' cash flows and using a 9% discount rate, which projects that would have been accepted under Payback Period will now be rejected under Net Present Value? Project 4 £19,000 £11,000 £12,000 £0
NPV ProfileThe figure below shows the NPV profile for two investment projects.Refer to NPV Profile. If Gamma Company has a hurdle rate of 11%, and the two projects are independent, which project should Gamma Company invest? Group of answer choices Project 2 Both project 1 and project 2. Neither project Project 1
need step by step answer
Valuation Problem Calculate NPV and IRR for the following investment. Initial investment = $1,000,000 machine, the project term is 6 years, ncf yr 1 = 387,160 ncf yr 2 = 459,460 ncf yr 3 = 465,322 ncf yr 4 = 481,725 ncf yr 5 = 506,617 ncf yr 6 = 269.200 and the discount rate is 12%.
How I resolve this problems please give me the detail A firm has the following investment alternatives: Year A B C 1 $400 $--- $---- 2 400 400 ---- 3 400 800 ---- 4 400 800 1,800 Each investment cost of capital is 10 percent a. What is each investment's internal rate of return? b. Should the firm make any of theses investment? C. What is each investemtn's net present value? d. Should the firm make any of these investment
19 es TB MC Qu. 14-36 (Algo) Moates Corporation has... Moates Corporation has provided the following data concerning an investment project that it is considering: $ 190,000 $ 120,000 per year 4 years 9% Initial investment Annual cash flow Expected life of the project Discount rate Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the project is closest to: Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Multiple Choice $190,000 $198,680 $(70,000)
KLA Cost Ziege Systems is considering the following independent projects for the coming year Project Required Investorent Rate of Return Risk A $4 million 12.25% Hish High $5 million Low B C DEFGH $3 million $2 million $6 million $5 million $6 million $3 million 500 14.75 10.25 9.75 13.25 13.25 7.75 12.25 million Average High Average Low Low } If Ziege con only invest a total of $13 million what would be the dollar size of its capital budget? $ million What would be the dollar size of its capital budget? $
The Company has three potential projects from which to choose. Selected information on each of the three projects follows: Project A Project B Project C Investment required $44,400 $55,700 $53,100 Net present value of project $49,100 $74,100 $69,100 Using the profitability index, rank the projects from most profitable to least profitable. A, B, C B, A, C B, C, A C, B, A
Raghubhai
Project A has the following estimated cash flows and present values:Year Cash flow $ Discount factor@ 12% Present value $0 Cost (95 000) 1.0 (95 000) 1–5 Contributionper annum 50 000 3.605 180 250 1–5 Fixed costsper annum (25 000) 3.605 (90 125) 5 Residual value 20 000 0.567 11 340 The benefit of using sensitivity analysis in an investment appraisal would be:
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