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b. Mutually exclusive projects
when comparing mutually exclusive projects based on B/C analysis we need to use incremental analysis
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13. When comparing ................ ..... based on B/C analysis, we need to use the incremental analysis. independe...
18. Comparing Inve 1. Comparing Investment Criteria Consider the following cash flows of two mutually! exclusive...
18. Comparing Inve 1. Comparing Investment Criteria Consider the following cash flows of two mutually! exclusive projects for Tokyo Rubber Company. JCCS for Tokyo Rubber Company. Assume the discount rate for both proi ects is 8 percent. Year Dry Prepreg Solvent Prepreg -$1,500,000 900,000 700,000 725,000 -$650,000 345,000 570,000 360,000 a. Based on the payback period, which project should be taken? b. Based on the NPV, which project should be taken? c. Based on the IRR, which project should be...
18. Comparing Investment Criteria Consider the following cash flows of two mutually exclusive projects for Tokyo...
18. Comparing Investment Criteria Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the discount rate for both projects is 8 percent. Year Dry Prepreg Solvent Prepreg -$1,700,000 1,100,000 900,000 --$750,000 375,000 600,000 390,000 750,000 a. Based on the payback period, which project should be taken? b. Based on the NPV, which project should be taken? c. Based on the IRR, which project should be taken? d. Based on this analysis, is incremental IRR...
Which of the following is true about comparing NPV and IRR rule? (a) NPV is strictly...
Which of the following is true about comparing NPV and IRR rule? (a) NPV is strictly better than IRR so no CFO or CEO in the real world actually uses IRR. (b) No matter what the cash flow patterns are, with unlimited resources and same project lives, we can always choose the one with highest NPV among mutually exclusive projects. (c)When mutually exclusive projects have different lives, we should use IRR rather than NPV rule. (d) NPV rule guarantees correct...
This might be wrong. I need a help for correct answer. Thank you. QUESTION 14 Which...
This might be wrong. I need a help for correct answer. Thank
you.
QUESTION 14 Which of the following statements is true? We can use NPV to evaluate two mutually exclusive repeated projects. To make an investment decision based on IRR, we do not need to know the appropriate discount rate. We can use profitability index to evaluate mutually exclusive project. For a given project, NPV and Discounted Payback Period will reach the same decision if the targeted time is...
Which of the following statement of IRR analysis is TRUE? A. A project can only have...
Which of the following statement of IRR analysis is TRUE? A. A project can only have one IRR. B. If a project has two IRR, then we will accept the project when the required rate of return is smaller than both IRR. C. When evaluating mutually exclusive projects, the project with highest IRR also has the highest NPV. D. When calculating IRR of a project, we need both cash flows and required rate of return of the project. E. For...
If the projects were independent, which project(s) would be accepted according to the IRR method? a)...
If the projects were independent, which project(s) would be
accepted according to the IRR method?
a) Neither
b) Project A
c) Project B
d) Both Projects A or B
If the projects were mutually exclusive, which project(s) would
be accepted according to the IRR method?
a) Neither
b) Project A
c) Project B
d) Both Projects A or B
The reason is
a) TheNPV and IRR approaches use the same reinvestment rate
assumption and so both approaches reach the same...
Hello, I need the full workings and reasoning for the entire question below. Thank you! (b)...
Hello, I need the full workings and reasoning for the entire
question below. Thank you!
(b) Consider the following cashflows for 3 mutually exclusive projects: Year 0 Year 1 Year 2 Year 3 Apollo -$2,000 $1,500 $100 $800 Saturn -$1,000 $800 $500 $500 Mercury -$3,000 $1,500 $2,000 $1,000 IRR 34.37% 40.76% 24.81% The MARR for each project is 15%. Employ incremental analysis to select the best project from the above 3 projects. Discuss your selection. (13 marks)
Fill in the blank with the given word bank below: In a B/C ratio, an estimate...
Fill in the blank with the given word bank below: In a B/C ratio, an estimate is placed in the denominator when it affects the ___________. In comparing multiple mutually exclusive alternatives by the B/C method, it is usually necessary to conduct a(an) ___________ to identify the best one In a modified B/C ratio, M&O (maintenance and operations) costs are included in the _______________. Incremental analysis Disbenefits Higher Benefit and costs, disbenefits PW analysis over the LCM of lives Numerator...
Using the incremental B-C analysis, B-C ratio with PW and a MARR of 10%, choose the...
Using the incremental B-C analysis, B-C ratio with PW and a MARR of 10%, choose the best alternative from the following three mutually exclusive alternatives given below. State your assumptions. Option B Option C Option A $30000 $50000 $70000 5 10 15 Initial investment Life in years Salvage value Annual benefits 0 0 $2000 $8000 $8000 $8000
If the projects were independent, which project(s) would be accepted? a) Neither b) Project A c)...
If the projects were independent, which project(s) would be
accepted?
a) Neither
b) Project A
c) Project B
d) Project A and B
If the projects were mutually exclusive, which project(s) would
be accepted?
a)Neither
b) Project A
c) Project B
d) Project A and B
Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line...
18. Comparing Inve 1. Comparing Investment Criteria Consider the following cash flows of two mutually! exclusive projects for Tokyo Rubber Company. JCCS for Tokyo Rubber Company. Assume the discount rate for both proi ects is 8 percent. Year Dry Prepreg Solvent Prepreg -$1,500,000 900,000 700,000 725,000 -$650,000 345,000 570,000 360,000 a. Based on the payback period, which project should be taken? b. Based on the NPV, which project should be taken? c. Based on the IRR, which project should be...
18. Comparing Investment Criteria Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the discount rate for both projects is 8 percent. Year Dry Prepreg Solvent Prepreg -$1,700,000 1,100,000 900,000 --$750,000 375,000 600,000 390,000 750,000 a. Based on the payback period, which project should be taken? b. Based on the NPV, which project should be taken? c. Based on the IRR, which project should be taken? d. Based on this analysis, is incremental IRR...
This might be wrong. I need a help for correct answer. Thank
you.
QUESTION 14 Which of the following statements is true? We can use NPV to evaluate two mutually exclusive repeated projects. To make an investment decision based on IRR, we do not need to know the appropriate discount rate. We can use profitability index to evaluate mutually exclusive project. For a given project, NPV and Discounted Payback Period will reach the same decision if the targeted time is...
If the projects were independent, which project(s) would be
accepted according to the IRR method?
a) Neither
b) Project A
c) Project B
d) Both Projects A or B
If the projects were mutually exclusive, which project(s) would
be accepted according to the IRR method?
a) Neither
b) Project A
c) Project B
d) Both Projects A or B
The reason is
a) TheNPV and IRR approaches use the same reinvestment rate
assumption and so both approaches reach the same...
Hello, I need the full workings and reasoning for the entire
question below. Thank you!
(b) Consider the following cashflows for 3 mutually exclusive projects: Year 0 Year 1 Year 2 Year 3 Apollo -$2,000 $1,500 $100 $800 Saturn -$1,000 $800 $500 $500 Mercury -$3,000 $1,500 $2,000 $1,000 IRR 34.37% 40.76% 24.81% The MARR for each project is 15%. Employ incremental analysis to select the best project from the above 3 projects. Discuss your selection. (13 marks)
Using the incremental B-C analysis, B-C ratio with PW and a MARR of 10%, choose the best alternative from the following three mutually exclusive alternatives given below. State your assumptions. Option B Option C Option A $30000 $50000 $70000 5 10 15 Initial investment Life in years Salvage value Annual benefits 0 0 $2000 $8000 $8000 $8000
If the projects were independent, which project(s) would be
accepted?
a) Neither
b) Project A
c) Project B
d) Project A and B
If the projects were mutually exclusive, which project(s) would
be accepted?
a)Neither
b) Project A
c) Project B
d) Project A and B
Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line...
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