Question
Carefully analyze the Annexure A and answer the following questions in detail. 1.Just by observing cashflows, can you rank the projects? Which one seems best
Carefully analyze the Annexure A and answer the following questions in detail.
1.Just by observing cashflows, can you rank the projects? Which one seems best choice. List them in the order of selection from 1st to last choice.
2.What are the criteria that you might use in evaluating these projects? Which capital budgeting method seems best choice for you? why?
3.List the ranking you found by using each the evaluation criteria starting from payback period to Modified internal rate of return (use pay back, discounted payback, profitability Index, NPV, IRR, and MIRR based on (Wacc discount rate). How do you interpret the results based on each of six criteria?
4.Analyze the cashflows and think of real-life businesses that can generate similar cashflows. List a few of them?
5.Repeat point number 3 while using the cost of capital of 9.25% and 11% respectively. Does the change in cost of capital have any impact on the ranking of the projects? why?
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