Question
Need to answer the following question it is due tomorrow, please if someone can help me! Please see the attached for problems. The discussion activity
Need to answer the following question it is due tomorrow, please if someone can help me! Please see the attached for problems.
The discussion activity for Module 6 entails computing net present value (NPV) and internal rate of return (IRR) and solving capital budgeting problems.
For your computations, you can use the interest tables provided in the textbook's appendixes, software such as Excel, a financial calculator, or any of the pertinent computer programs included with South-Western's Investment Analysis Calculator. [Hint: Most useful for solving NPV and IRR problems with the Investment Analysis Calculator are programs under the sections Financial Calculator and Rate of Return (Dollar-Weighted or IRR).]
Here are the steps to follow:
6. Two mutually exclusive investments cost $10,000 each and have the following cash inflows. The firm's cost of capital is 12 percent. Investment Cash inflow: Year A B 1 $12,407 ------ 2 -------- ------ 3 -------- ------ 4 -------- $19,390 a. What is the net present value of each investment? b. What is the internal rate of return of each investment? c. Which investment (s) should the firm make? d. Would you answers be different to if the funds received in year 1 for investment A could be reinvested at 12 percent? 16 percent? 20 percent? 8. A firm has the following investment alternatives: Cash Inflows Year A B C 1 $400 $----- $----- 2 400 400 ------- 3 400 800 ------- 4 400 800 1,800 Each investment costs $ 1,400 and the firm's cost of capital is 10 percents. a. b. c. d. What is each investment's internal rate of return? Should the firm make any of these investments? What is each investment's net present value? Should the firm make any of these investments
- Using the computation tool(s) of your choice to determine NPV or IRR, answer the eight capital budgeting problems found at the following link:
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