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Calculate the company's return on equity and whether the managers are providing a good return on the capital provided by the company's shareholders.
Do capital budgets have an impact on operating budgets? Explain.
Should they be included in the cash flow estimation when making a capital budgeting decision? Why or why not?
Techniques for evaluating possible capital projects are the Payback Period, Net Present Value, and Internal Rate of Return.
Q1. Calculate the payback period for the proposed investment. Q2. Calculate the net present value (NPV) for the proposed investment.
Compare and contrast the Internal Rate of Return (IRR), the Net Present Value (NPV), and Payback approaches to capital rationing. Which do you think is better?
Identify the benefits and drawbacks of using the CAPM.
Questin 1: To what extent do not-for-profit organizations have the ability to choose among the following:
1) What is the firm's annual profit or loss? 2) What is the price for each unit? 3) At what volume of sales does the firm break even?
1. Determine the net present value of cash flows from an undergraduate degree. (using EX2)
Explain the pros and cons of the simple payback method, the net present value method and IRR method
In your opinion, what strengths and weaknesses do line items contain? Explain in detail.
Which of the following qualitative factors favors the buy option in the make or buy decision?
Identify and explain one to two (1-2) challenges you will have in managing the budget.
The project has a payback of 2.5 years. The firm’s cost of capital is 12 percent. What is the project’s net present value NPV?
Prepare a capital budget for the items to be acquired, showing their estimated lifetimes, and their per unit and total costs.
How would the company's after-tax cash inflow be affected if (a) it donated the land or (b) it sold the land for $110,000? How would its net income be affected?
Define decentralized budgeting. Discuss what benefits could be realized by implementing decentralized budgeting and defend with examples.
Q1. Calculate the payback period. Q2. Calculate the machine's internal rate of return.
How much, if any, value will be forgone, i.e., what's the chosen NPV versus the maximum possible NPV?
Using the ARR model, compute the rate of return on the initial investment.
1. What is the payback time? 2. Compute the NPV if the minimum rate of return desired is 8%. should department buy the heater? Why?
Compare each capital budget technique, showing the advantages and disadvantages of each. Should the manager select just one? Why or why not?
Question: Find the present value for the following: - In 15 years you will be given $79,000 - Assume an inflation rate of 2.4%
Calculate the terminal value and discount back to the present: