COST MANAGEMENT: A STRATEGIC EMPHASIS E
COST MANAGEMENT: A STRATEGIC EMPHASIS E
8th Edition
ISBN: 9781260912449
Author: BLOCHER
Publisher: MCG
Question
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Chapter 12, Problem 39E

1.

To determine

Compute the estimated net present value of the projectusing thebuilt-in NPV function inExcel;assume that the after-tax cost of capital is 12%.

2.

To determine

Compute the estimated NPV of the project using excel, assume that the after-tax cost of capital is 15%.

3.

To determine

Compute the project’s IRR using excel.

4.

To determine

Calculate the maximum amount that can be invested up front in order to generate an economic rate of return equal tothe 15% rate of return specified by management as appropriate for the proposed investment. Use the Goal Seek function in Excel.

5.

To determine

Describe whether adjusting the discount rate or the desired rate of return is an effective way to deal with risk or uncertainty.

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Chapter 12 Solutions

COST MANAGEMENT: A STRATEGIC EMPHASIS E

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