Practical Management Science
Practical Management Science
5th Edition
ISBN: 9781305250901
Author: Wayne L. Winston, S. Christian Albright
Publisher: Cengage Learning
bartleby

Concept explainers

bartleby

Videos

Textbook Question
Book Icon
Chapter 2, Problem 44P

The IRR is the discount rate r that makes a project have an NPV of $0. You can find IRR in Excel with the built-in IRR function, using the syntax =IRR(range of cash flows). However, it can be tricky. In fact, if the IRR is not near 10%, this function might not find an answer, and you would get an error message. Then you must try the syntax =IRR(range of cash flows, guess), where “guess" is your best guess for the IRR. It is best to try a range of guesses (say, −90% to 100%). Find the IRR of the project described in Problem 34.

34. Consider a project with the following cash flows: year 1, −$400; year 2, $200; year 3, $600; year 4, −$900; year 5, $1000; year 6, $250; year 7, $230. Assume a discount rate of 15% per year.

  1. a. Find the project’s NPV if cash flows occur at the ends of the respective years.
  2. b. Find the project’s NPV if cash flows occur at the beginnings of the respective years.
  3. c. Find the project’s NPV if cash flows occur at the middles of the respective years.
Blurred answer
Students have asked these similar questions
The results of your four plans will provide an indicative EOQ value. State this value and discuss in a precise manner, why it is not the exact, true value.  Additional calculations in the form of plans E, F etc. may also assist your explanation of the EOQ and can be included
i). Complete the table assuming a Level production plan. ii) Comment on your results and explain whether at this stage, you consider a Level plan is a suitable approach for this particular business. Your comment should include reference to a calculated ‘fill rate’.
In the following sawtooth inventory profile diagram, two inventory plans with different order quantities (Q) and different frequencies of delivery are shown; order quantity for Plan A = 200 units and Plan B = 50 units. i). Total demand (D) is 350 units, the holding cost per unit (Ch) is equal to (£0.8) and the ordering cost per order (Co) is (£12.5). Calculate the total costs for each plan and state which one is more preferable along with the reason why.  ii). There is a stark difference in the composition of the total costs of Plans A and B. Explain this difference and why it occurs. Use the breakdown of costs for each plan to help illustrate your answer.
Knowledge Booster
Background pattern image
Operations Management
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Single Exponential Smoothing & Weighted Moving Average Time Series Forecasting; Author: Matt Macarty;https://www.youtube.com/watch?v=IjETktmL4Kg;License: Standard YouTube License, CC-BY
Introduction to Forecasting - with Examples; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=98K7AG32qv8;License: Standard Youtube License