104 368
Assignments Done
99.1%
Successfully Done
In January 2022

# Answer to Question #273439 in Finance for Richard

Question #273439

Company uses a 10% interest rate for all capital expenditures and has done the following analysis for four projects for the upcoming year:

Project A

Initial capital outlay $200,000 Annual net cash inflows Year1 65,000 - Year2 70,000 - Year3 80,000 - Year4 40,000 Project B Initial capital outlay$298,000

Annual net cash inflows Year1 100,000 - Year2 135,000 - Year3 90,000 - Year4 65,000

Project C

Initial capital outlay $248,000 Annual net cash inflows Year1 80,000 - Year2 95,000 - Year3 90,000 - Year4 80,000 Project D Initial capital outlay$272,000

Annual net cash inflows Year1 95,000 - Year2 125,000 - Year3 90,000 - Year4 60,000

a)     You are required to select one of the above projects using Accounting Rate of Return; Payback Period; Net Present Value.

b)     Which project(s) company should undertake using NPV if it has 500,000 funds available?

1
2021-12-05T18:54:25-0500

a)

Net Present Value:

"NPV=\\sum\\frac{CF_t}{(1+r)^t}=13000"

where CFis cash inflow during a single period t,

r is internal rate of return

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!