Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Financial Management Expert

problem 1: An Organization is considering two mutually exclusive proposals to install new milling controls. The cost of proposal A is Rs 2,700,000 and proposal B is Rs. 3, 000,000. The projects have a life expectancy of 6-years each and no salvage value. The tax rate is 50%. Suppose the firm uses straight line method of depreciation and the same is permitted for tax purposes. The estimated cash flows before depreciation and tax (CFBT) from the investment proposal are as shown below:

1396_investment proposal.jpg

817_value of annuity.jpg

Required: find out the given:

a) Payback period
b) Average Rate of Return
c) Net present value @ 15%
d) Profitability Index
e) Propose which project must be adopted by the company

problem 2: The management of an organization is considering opening a new plant. Assess the usefulness to management of both the payback period and net present value methods of investment appraisal when deciding where to locate the new plant.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M96363

Have any Question? 


Related Questions in Financial Management

Investment problem1 a credit union wants to make

Investment Problem 1) A credit union wants to make investments in the following: Type of Investment Annual Rate of Return (%) Vehicle loans 6 Consumer loans 12 Other secured loans 5 Signature loans 8 Risk-free securities ...

Yoursquore trying to determine whether to expand your

You’re trying to determine whether to expand your business by building a new manufacturing plant. The plant has an installation cost of $13 million, which will be depreciated straight-line to zero over its four-year life ...

A companyrsquos stock is currently worth 5000 per share

A company’s stock is currently worth $50.00 per share based on a recent quarterly dividend of $0.99 per share, expected quarterly growth of 1%, and a required rate of return of 12% compounded quarterly. However, new info ...

1 how much will the interest be on a loan of 2350 at a

1. How much will the interest be on a loan of $2,350 at a simple interest of 7% for 6 months? 2. If a loan of $5,750 is taken out at a simple interest of 5.25% for a year and a half, how much interest will the borrower p ...

A 15-year annuity pays 1650 per month and payments are made

A 15-year annuity pays $1,650 per month, and payments are made at the end of each month. If the interest rate is 10 percent compounded monthly for the first seven years, and 6 percent compounded monthly thereafter, what ...

You own 14504 of opsware inc stock that has an assumed beta

You own $14,504 of Opsware, Inc., stock that has an assumed beta of 3.85. You also own $20,384 of Lowe’s Companies (assumed beta = 1.89) and $4,312 of New York Times (assumed beta = 1.17). Assume that the market return w ...

The net operating profit margin is 19 for widgetco and 21

The net operating profit margin is 19% for WidgetCo and 21% for Tool. Which of the following statements is the most plausible explanation of the difference in observed net operating profit margins? WidgetCo's has lower f ...

1 describe in your own words the meaning of figure why is

1. Describe in your own words the meaning of Figure. Why is measurement so important in the testing of research hypotheses? 2. Indicate the relationships between nominal, ordinal, interval, and ratio scales and the conce ...

Write the profile of company celcom the length should be

Write the profile of company "celcom" the length should be about 2 pages (should include the management information system the company use)

When marilyn monroe died ex-husband joe dimaggio vowed to

When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers on her grave every Sunday as long as he lived. The week after she died in 1962, a bunch of fresh flowers that the former baseball player thou ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen