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Determine the net present value of the investment in the paint and body shop. Should the owner invest in the paint and body shop?
a. Compute the NPV of both projects b. Compute the internal rate of return on both projects c. Compute the profitability index of both projects
On the basis of the net present value criterion, should the monkey be hired (and the junior executive fired)?
Compute and report the Internal Rate of Return (IRR) of the project (accurate to 2 digits after the decimal point) and the NPV at a discount rate of 8% (0.08).
Explain why sunk costs should not be included in a capital budgeting analysis, but opportunity costs and externalities should be included.
The initial cost of an investment is $65,000 and the cost of capital is 10%. The return is $16,000 per year for 8 years. What is the net present value?
a. What is the IRR of these cash flows? b. What does the firm's required return on projects of such risk have to be for this project to be undertaken? Explain.
Calculate the payback period and net present value for each project (assuming a 10% discount rate).
One costs 190,000 with a 3 year expected life with after-tax cash flows (labor savings and depreciation)of 807,000 per year.
If the CEO's preferred criterion is used, how much value will the firm lose as a result of this decision?
Construct the cash flow of the proposed investment. Then compute the net present value of the proposed investment using Theta's weighted average cost of capital
Question 1: What is meant by capital planning? Question 2: How would you select from multiple projects presented to the insurance company whom you work for?
Use the following sophisticated capital budgeting techniques to assess the acceptability and relative ranking of each lathe:
What working capital strategies can a company employ to maximize shareholder wealth?
Discuss the role of working capital policy and cash budgeting on regards to the optimization of working capital within the firm.
a. What is the payback period for this bond? b. With such a long payback period, is the bond a bad investment?
Which of the following factors should be considered in calculating capital budget projects?
1) What is each project's payback period? 2) What is each project's net present value? 3) What is each project's internal rate of return?
If the company's Cost of Capital is 13%, what is the Payback, Net Present Value, and Profitability Index for each of these projects?
Include a discussion of pay back as one of the valuation methodologies in addition to NPV, IRR and MIRR.
The growth rate is 9%. The flotation cost is $5.00. What is the cost of retained earnings?
If you were given the components of current assets and of current liabilities, what ratio(s) could you compute?
Describe how businesses make capital budgeting decisions.
Using the net present value criterion, which is the most desirable project?
What is meant by capital requirements for the business? Why do all businesses need be concerned about capital?