You have two projects that met the payback period and accounting rate of return screenings identically. Project 1 produced an NPV of Php 450,000 and had an IRR between 5% and 8%. Project 2 produced a NPV of Php 350,000 and had an IRR of 10%. This leaves you with a difficult choice, since each alternative has a measurement that exceeds the other and the other variables are the same. Which project would you invest in and why?

Q: ssume that an investment is expected to generate the following returns: a 10% chance of a $1,400…

A: Expected rate of return is the expected rate based on the probability of happening the events and is…

Q: You are considering investing in one of two projects, which have the following returns and…

A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: You have a project that has an initial cost of $675,000. It is expected to earn $82,000 annually for…

A: Initial Cost = $675,000 Annual cash flow = $ 82,000

Q: You are considering an investment that will cost $15,000 and generate returns of $4,000 at the end…

A: Whenever an individual or a corporation has to evaluate the investment based upon the feasibility of…

Q: AL Hajis LLC has calculated the profitability index for its project. A profitability index (PI) of…

A: Profitability Index: It is a financial measure that helps in calculating the worth of the project…

Q: Your boss wants you to conduct a sensitivity and scenario analysis to determine whether the…

A: Net present value is the investment evaluation technique, where we evaluate that whether the…

Q: Note: Only Excell sheet submission will be graded. 1. Three mutually exclusive investment…

A: We can use both NPV and IRR to decide the investment project from various projects. In this scenario…

Q: (a) Compute the profitability index for each project. (b) Based on the profitability index, which…

A: It's a method of capital Budgeting.  It helps us to know whether a project must be accepted or…

Q: You look at the rate of returns, and the betas of different capital investment options. To determine…

A: Return as per CAPM (Er) = Rf + (Rm - Rf) X BWhere Rf= Risk free return, Rm = Market return and B =…

Q: You are considering an investment that will cost $15,000 and generate returns of $4,000 at the end…

A: NPV is the sum of present value of future cashflows less initial investment

Q: The CEO asked you to take charge of the following projects for the company. However, he told you…

A: Profitability index is a measure of financial index which is used to measure how profitable a…

Q: You have been offered a unique investment opportunity. If you invest $10,000 today, you will receive…

A: Net present value is the modern method of capital budgeting that is used to determine the present…

Q: Ahsan, an individual investor, is evaluating the investment opportunity. To evaluate this in…

A: Expected rate is the average rate of return considering the the probability of the return. Expected…

Q: Your company is considering a project for which you oversee the analysis. The company has spent…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: whether Alpha, Beta, and/or Gamma should be eliminated because the average rate of return of their…

A: Average rate of return = Estimated average annual income/average investment Average investment =…

Q: Gama industry has the amount of $ 600000 for investment at MARR= 15%. The manager of this company…

A: Given: rates of return of project 1 = 24% rates of return of project 2 = 18% rates of return of…

Q: You are considering the following projects and can take only one. Your cost of capital is 11%. 0 1 2…

A: The expense a company generates to finance its activities is measured by the cost of capital. It…

Q: A project is thought to have a 0.55 probability of making a profit of P400,000 and a 0.45…

A: EMV=Probability x affect If probability is  to .55 and .45 =.55 x P400,000=P220,000 = .45 x…

Q: Project A has an internal rate of return (IRR) of 15 percent. Project B has an IRR of 14 percent.…

A: Here,IRR of Project A is 15%IRR of Project B is 14%Required Return is 12%Projects are not mutually…

Q: Economic Scenario Probability of Outcome Recession ($40 million) (24 million) 12 million 18 million…

A: NPV is the most used capital budgeting techniques and can be found as the difference between the…

Q: Do not use chatgpt.

A: a-1)Project I1.081  Project II1.162     a-2)Project II Which has higher PI    b-1)Project I6,046.43…

Q: You are choosing between two projects. The cash flows for the projects are given in the following…

A: Here,

Q: Project A has an IRR of 14% and NPV of $8,000 while project B has an IRR of 17% and an NPV of…

A: NPV means Net present value.It is a capital budgeting technique used for making investment…

Q: Assume you are risk-averse and have the following three choices Standard Deviation $1,440 1,960…

A: Coefficient of variation computed as follows:-Coefficient of variation =

Q: Huang Industries is considering a proposed project whose estimated NPV is $12 million. This estimate…

A: The excess of any investment's present value over its initial investment is regarded as its net…

Q: A company has the opportunity to make one of two possible investments. Each investment costs R100…

A: Range of outcomes will be calculated by multiplying Expected Return with the probability and adding…

Q: Consider the case of another company. Kim Printing is evaluating two mutually exclusive projects.…

A: The standard deviation of a project's NPV represents the total risk of project and it is…

Q: our firm has limited capital to invest and is therefore interested in comparing projects based on…

A: Profitability index is a very simple method and can be calculated as the ratio of present value…

Q: Your firm has limited capital to invest and is therefore interested in comparing projects based on…

A: Profitability index refers to the method of capital budgeting used by the investors for selecting…

Q: Corporation is considering two possible investments and needs your help in determining which will be…

A: Here, Initial Outlay $ 131,000Salvage Value $   39,300Net Annual Cash Inflows $   29,500Minimum…

Q: A project’s coefficient of variation is 0.55. The project has a positive coefficient of correlation…

A: Given that: Expected value = $1200 Coefficient of Variation = 0.55

Q: Managers are evaluating two independent projects. Project X has a NPV of $282,500 and a…

A: The information provided in the question about the two projects shows:Project X: NPV = $282,500,…

Q: Use the NPV method to determine whether Kyler Products should invest in the following projects: •…

A: NET PRESENT VALUE Net Present Value is one of the Important Capital Budgeting Technique.  Net…

Q: As the CFO of Yo co., you are considering three projects with different levels of risks. You…

A: WACC is the average cost of capital of the company. the relationship between WACC and the rate of…

Q: g Industries is considering a proposed project whose estimated NPV is $12 million. This estimate…

A: Standard deviation is square root of the sum of square of deviation from mean and standard deviation…

Q: Huang Industries is considering a proposed project whose estimated NPV is $12 million. This estimate…

A: NPV The difference between the profit from an investment and the costs incurred during the…

Q: If the alternatives are independent and the MARR is 15% per year, the one(s) that should be selected…

A: The minimum possible required return at which a company is willing to invest its funds is term as…

Q: The Everett Co. is looking a project with an outlay of $810  which will have a positive cash flow at…

A: IRR is the rate at which NPV is zero

Q: You are choosing between two projects. The cash flows for the projects are given in the following…

A: NPV is also known as Net Present Value. it is a capital budegting technique which helps in decision…

Q: Elizabeth Corporation is starting two new projects. Project A requires an investment of $5,000, has…

A: Project A:Initial investment: $5,000Expected return: 16%Standard deviation: 14%Project B:Initial…

Q: A $182,000 initial investment will generate the following present values of net cash flows. What is…

A: Break-even time period: The break-even period is the time you need to recover the cost of your…

Q: Below are four cases that you will have to solve using Excel spreadsheets. 2nd case The COMPETIDORA…

A: Capital budgeting refers to a concept used for estimating the viability of the project using various…

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A: How dispersed the data is indicated by standard deviation. The metric for determining how far each…

Q: Office of Business Administration tells you that Villa Apartment has a project to expand the current…

A: NPV is the difference between present value of cash inflows and initial investment. NPV =PV of all…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.