fou have just started your summer internshlp, and your boss asks you to review a recent analysis that was done to compare three altemative proposais to enhance the firm's manufocturing facuty lou find that the prior analysis ranked the proposals according to their IRR and recommended the highest IRR opfion, Proposal A. You are concorned and decide to redo the analysis using NPV to delermine whether this recommendation was appropriate. But whilo you are contident the IRRS were computed cocrectyy, it seems that some of the underlying data regarding the cash fows that wer estimated for each proposal was not indvided in the report. For Proposal B, you cannot find information regarding the total inibal imvesiment that was reguired in Year 0. And for Propesal C, you cannol find the data tegarding additional saivage value that will be recovered in Year 3. Here is the information you havo (in Smillions): a. Determine the two missing data amounts. b. Suppose the appropriate cost of capital foc each alternative is 10%. Using this information, determine the NPV of ench proposal. Which peoject should the firm choose? c. Why is ranking the projects by their lifR not valld in this situation? a. Deterrine the two missing data amounts (Imilions). fou have just started your summer internshlp, and your boss asks you to review a recent analysis that was done to compare three altemative proposais to enhance the firm's manufocturing facuty lou find that the prior analysis ranked the proposals according to their IRR and recommended the highest IRR opfion, Proposal A. You are concorned and decide to redo the analysis using NPV to delermine whether this recommendation was appropriate. But whilo you are contident the IRRS were computed cocrectyy, it seems that some of the underlying data regarding the cash fows that wer estimated for each proposal was not indvided in the report. For Proposal B, you cannot find information regarding the total inibal imvesiment that was reguired in Year 0. And for Propesal C, you cannol find the data tegarding additional saivage value that will be recovered in Year 3. Here is the information you havo (in Smillions): a. Determine the two missing data amounts. b. Suppose the appropriate cost of capital foc each alternative is 10%. Using this information, determine the NPV of ench proposal. Which peoject should the firm choose? c. Why is ranking the projects by their lifR not valld in this situation? a. Deterrine the two missing data amounts (Imilions)
