NPV and IRR. Higher Ground Company is presented with the following two mutually exclusive projects. The required
Question:
NPV and IRR. Higher Ground Company is presented with the following two mutually exclusive projects. The required return for both projects is 15 percent.
a. What is the IRR for each project?
b. What is the NPV for each project?
c. Which, if either, of the projects should the companyaccept?
Transcribed Image Text:
Year Project MProject N (S145,000)(S350,000) 155,000 175,000 140,000 105,000 63,000 81,000 72.000 58,000
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 72% (11 reviews)
a Computation of the IRR on each Project Year Cash Flow A Cash Flow B 0 145000 3500...View the full answer
Answered By
Saikumar Ramagiri
Financial accounting:- Journal and ledgers, preparation of trail balance and adjusted trail balance Preparation of income statement, retained earning statement and balance sheet Banks reconciliation statements Financial statement analysis Cash flow statement analysis (both direct and indirect methods) All methods of Depreciations Management Accounting:- Ratios Budgeting control Cash budget and production budget Working capital management Receivable management Costing:- Standard and variance costing Marginal costing and decision making Cost-volume-profit analysis Inventory management (LIFO, FIFO) Preparation and estimation of cost sheet Portfolio management:- Calculation of portfolio standard deviation or risk Calculation of portfolio expected returns CAPM, Beta Financial management:- Time value of money Capital budgeting Cost of capital Leverage analysis and capital structure policies Dividend policy Bond value calculations like YTM, current yield etc International finance:- Derivatives Futures and options Swaps and forwards Business problems Finance problems Education (mention all your degrees, year awarded, Institute/University, field(s) of major): Education Qualification Board/Institution/ University Month/Year of Passing % Secured OPTIONALS/ Major ICWAI(inter) ICWAI inter Pursuing Pursuing - M.com(Finance) Osmania University June 2007 65 Finance & Taxation M B A (Finance) Osmania University Dec 2004 66 Finance & Marketing. B.Com Osmania University June 2002 72 Income Tax, Cost & Mgt, Accountancy, Auditing. Intermediate (XII) Board of Intermediate May 1999 58 Mathematics, Accountancy, Economics. S S C (X) S S C Board. May 1997 74 Mathematics, Social Studies, Science. Tutoring experience: • 10 year experience in online trouble shooting problems related to finance/accountancy. • Since 6 Years working with solution inn as a tutor, I have solved thousands of questions, quick and accuracy Skills (optional): Technical Exposure: MS Office, SQL, Tally, Wings, Focus, Programming with C Financial : Portfolio/Financial Management, Ratio Analysis, Capital Budgeting Stock Valuation & Dividend Policy, Bond Valuations Individual Skills : Proactive Nature, Self Motivative, Clear thought process, Quick problem solving skills, flexible to complex situations. Achievements : 1. I have received an Award certificate from Local Area MLA for the cause of getting 100% marks in Accountancy during my Graduation. 2. I have received a GOLD MEDAL/Scholarship from Home Minister in my MBA for being the “Top Rank student “ of management institute. 3. I received numerous complements and extra pay from various students for trouble shooting their online problems. Other interests/Hobbies (optional): ? Web Surfing ? Sports ? Watching Comics, News channels ? Miniature Collection ? Exploring hidden facts ? Solving riddles and puzzles
4.80+
391+ Reviews
552+ Question Solved
Related Book For
Essentials of Corporate Finance
ISBN: 978-1259277214
9th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
Question Posted:
Students also viewed these Corporate Finance questions
-
Reece Company is presented with the following two mutually exclusive projects. The required return for both projects is 15 percent. a. What is the IRR for each project? b. What is the NPV for each...
-
Kerron Company is presented with the following two mutually exclusive projects. The required return for both projects is 15 percent. Year _________Project M ___________Project N 0 .....................
-
Bausch Company is presented with the following two mutually exclusive projects. The required return for both projects is 15 percent. a. What is the IRR for each project?b. What is the NPV for each...
-
A red laser ( lambda r = 6 3 3 nm ) is shone through a narrow slit located 2 m from a screen. When the light source is replaced by a blue laser ( b = 4 8 8 nm ) the position of the first minimum of...
-
Fair Value Hedge: Put Options Over hill Farms Inc. has a large portfolio of marketable equity securities held as short-term investments. To protect against declines in the value of 10,000 shares of...
-
Let a 0. Rewrite (ax + b) 2 by using an absolute value.
-
The following selected accounts and balances appear on the adjusted trial balance for Ray Service, Inc., on December 31, 2010: 1. What is the net income or net loss? 2. What is the change in Retained...
-
Ian Muse has prepared the following list of statements about the time period assumption. 1. Adjusting entries would not be necessary if a companys life were not divided into artificial time periods....
-
Assume that your group is working in Finance Department of a construction company. Your company is considering the potential project as follow: Launching a new construction project. There are two...
-
Aquatic Line Company (ALC) manufactures a variety of strong and durable ropes. The company manufactures all their products in a large factory located near Nephi, Utah. All the types of ropes the...
-
Consider the following two mutually exclusive projects: Whichever project you choose, if any, you require a 13 percent return on your investment. a. If you apply the payback criterion, which...
-
Calculating Present Values. 2007 was also a good year to be an NFL quarterback. Tony Romo of the Dallas Cowboys signed a contract reportedly worth $67.5 million. The contract called for $16 million...
-
How might medical education address some of the health communication challenges presented in this chapter?
-
Gilbert owns 255 shares of Pine Corporation common stock, purchased during the prior year: 125 shares on July 5, for $22,000; and 130 shares on October 15, for $26,000. When Gilbert sells 60 shares...
-
Laura invested $ 6 5 0 at the end of every month in an investment fund that was earning interest at a rate of 4 . 4 4 % compounded monthly. She stopped making regular deposits at the end of 5 years...
-
Sales for Furthur Bus Company are shown in the table below. wwwwww Sales November December January February March $9,500 $10,000 $11,000 $12,100 $13,310 All sales are for credit, with 80% collected...
-
Indiana Bones Company produces and sells 2,000 units of a single product, a deluxe dog house. Selling price per unit Variable cost per unit Annual fixed cost $2,000 $1,000 $500,000 By how much will...
-
c) Four point charges are arranged as shown in the figure. Show the direction of net electric field at point P? +99 D P d +90 (1)
-
In Problems 23-26, suppose that people's heights (in centimeters) are normally distributed, with a mean of 170 and a standard deviation of 5. We find the heights of 50 people. a. How many would you...
-
Is it ethical to provide safety training in English to immigrant workers who speak little English, in order to reduce costs?
-
What is a futures contract? What are the advantages and disadvantages of futures contracts?
-
Several reasons have been proposed to justify mergers. Among the more prominent are (1) tax considerations, (2) risk reduction, (3) control, (4) purchase of assets at below-replacement cost, (5)...
-
Briefly describe the differences between a hostile merger and a friendly merger.
-
What are the steps in valuing a merger?
-
A golfer hits a golf ball with a club head velocity of 81 ft/s. Mass of golf club head (my): 190 g Mass of golf ball (m): 46g Coefficient of restitution (COR) (e): 0.83 What is the velocity of the...
-
The hull of a ship is often subdivided into watertight compartments to prevent the ship's sinking from a single puncture of the hull. Consider a rectangular compartment with a floor area of 500 ft...
-
A flux-cored arc-welding (FCAW) process is used to join twolow-alloy steel plates at a 90 angle. The joint is an outsidefillet weld. The plates are 1?4-in thick. The weld bead consists of55% metal...
Study smarter with the SolutionInn App