NOTE: NPV = PV - Initial Investment OR Present Value = Initial Investment + NPV
Project | Initial Investment | NPV | PV |
A | 300000 | 85000 | (300000+85000) = $ 385000 |
B | 400000 | 14000 | (400000+14000) = $ 414000 |
C | 100000 | 27000 | (100000+27000) = $ 127000 |
D | 900000 | 92000 | (900000+92000) = $ 992000 |
E | 400000 | 61000 | (400000+61000) = $ 461000 |
F | 100000 | 42000 | (100000+42000) = $ 142000 |
G | 900000 | 163000 | (900000+163000) = $ 1063000 |
Capital rationing NPV approach r with ฮ 13 7% cost of capital must sclect the opti...
Capital rationing-NPV approach A tirm with a 12.6% cost ot capital must select the optimal group ot projects trom those shown in the tollowing table, given its capital budget ot $1.10 million. NPV at 12.6% Project Initial investment cost of capital $88.000 $300,000 A 5,000 В 300,000 C. 100.000 17,000 D 900,000 95,000 E 500,000 72,000 F 200,000 53,000 155,000 800,000 a. Calculate the present value of cash inflows associated with each project. b. Select the optimal group of projects,...
Capital rationing—NPV approach A firm with a 13.3% cost of capital must select the optimal group of projects from those shown in the following table, given its capital budget of $1.20 million. Project Initial investment Damonu $300,000 300,000 300,000 900,000 500,000 100,000 800,000 NPV at 13.3% cost of capital $80,000 9,000 18,000 84,000 71,000 49,000 152,000 The present value of cash inflows for project A is $ . (Round to the nearest dollar.) The present value of cash inflows for...