and the IRR is lower than the rate of return. On the other hand, project B has a positive NPV and…
According to the project descriptions, $450,000 has been spent on the product and they average a total of $575,000 being spent in order to bring the product to the market. Even though the dollar amount spent in this project is high, the return on investment for this project is high; by the third year the product is forecasted to have a return of investments of $750,000. The product life of this project is forecasted to be 7 years. Because this product has not been used we would be the first company to launch the product to the market which would create an innovative style allowing our company to be the leader in the industry.…
(8 points) Our company expects a rate of return of 12% on all projects it undertakes. We must…
The higher the rate, the better. IRR is a good indicator of whether a company should accept a long term investment. Ideally, you want the IRR to be greater than the…
The Warehouse Facility Consolidation project is aim to improve the NH’s warehouse facilities and can save the company’s operating costs as well as increase the shipping speed. This project is in retail division with an NPV of 2.29, an IRR of 13.56%, and a payback period of 8.23 years and a payback index of 0.31. Also, this project was considered as a medium risk project with 9.25% discount rate. Expansion of Mail-order Catalog Business to Asia is a retail division project, it is considering expanding its mail-order to the Asian market. Although there two possibilities that might happen, succeed or fail, it viewed as a low risk project with very low lifetime project costs which is only 2.73 million. It had an IRR of 19.77%, a discount rate of 8.46%, and a payback period is more than 10 years and the profitability index of this project is 2.85. I choose this project is because the Asian market is a very big market, since the project is low risk and the cost of this project is very low, we think it is worth to try, because if this project is succeed, the company will earn more profit. The last project we selected for this year is Retail Store Expansion in Northeast. The NPV of this project is 5.34 and it had an IRR of 37.45%, a discount rate of 10.04% and a payback period is 5.33 years. We suggested…
If management stipulates that the internal rate of return must be equal to or greater than the discount rate, the project will still be justifiable at all discount rates. At all discount rates (8, 10, 12, 14, and 16 percent), the internal rate of return remains at 17.05 percent.…
c) Calculate the project’s Net Present Value (in MMK) and explain if the project should…
3.) In my opinion the company should accept the project based on the financial gain of the project.…
For the following projects, compute NPV, IRR, MIRR, profitability index, and payback. If these projects are mutually exclusive, which one(s) should be done? If they are independent, which one(s) should be undertaken?…
The IRR is 15% using the discount rate of 10% and fuel price of $0.8 per gallon, and 42.78%…
The results of the analysis and modifications are a positive NPV of GBP 13.5 million and an IRR of 25.97%. The Merseyside project should be accepted as long as the cost of capital is lower than 25.97%.…
We should accept the project because of the positive NPV and high IRR. We will gain $532 million in wealth which is a big money on the scale like this. The company has a bond rating of AA that makes the risk relatively low. So we should definitely say yes.…
I have been advised that any projects chosen should have an accounting rate of return at least 15% and company’s cost of capital is 10%. The cost of investment should be recovered within four years.…
I consider IRR as independent variable, NPV at minimum ROR and Equivalent Annuity as functions (just like Polynomials function in Math) for each 10 projects because project 6 (Effluent – water treatment at four plants) definitely should be done.…
$1,400,000 $1,200,000 $1,000,000 Net Present Value ($) $800,000 $600,000 $400,000 $200,000 $0 -$200,000 -$400,000 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% IRR = 13.8%…