Question
Muffins co. is considering to modernize its production facilities and it has two proposals under consideration. The expected cash flows associated with these projects is
Muffins co. is considering to modernize its production facilities and it has two proposals under consideration. The expected cash flows associated with these projects is as follows. The discount rate associated with both the projects is 12%.
Calculate payback for proposal 1
Years | Proposal 1- $ | Proposal 2- $ |
0 | (40,000) | (64000) |
1 | 18000 | 10000 |
2 | 24000 | 32000 |
3 | 32000 | 19000 |
4 | 11000 | 25000 |
Muffins co. is considering to modernize its production facilities and it has two proposals under consideration. The expected cash flows associated with these projects is as follows. The discount rate associated with both the projects is 12%.
Calculate NPV for proposal 2
Years | Proposal 1- $ | Proposal 2- $ |
0 | (40,000) | (64000) |
1 | 18000 | 10000 |
2 | 24000 | 32000 |
3 | 32000 | 19000 |
4 | 11000 | 25000 |
Muffins co. is considering to modernize its production facilities and it has two proposals under consideration. The expected cash flows associated with these projects is as follows. The discount rate associated with both the projects is 12%. Write that which proposal is better on the basis of NPV. Write only 1 or 2
Years | Proposal 1- $ | Proposal 2- $ |
0 | (40,000) | (64000) |
1 | 18000 | 10000 |
2 | 24000 | 32000 |
3 | 32000 | 19000 |
4 | 11000 | 25000 |
Muffins co. is considering to modernize its production facilities and it has two proposals under consideration. The expected cash flows associated with these projects is as follows. The discount rate associated with both the projects is 12%. Write that which proposal is better on the basis of profitability index . Write only 1 or 2
Years | Proposal 1- $ | Proposal 2- $ |
0 | (40,000) | (64000) |
1 | 18000 | 10000 |
2 | 24000 | 32000 |
3 | 32000 | 19000 |
4 | 11000 | 25000 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started