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please help me figute out how to answer with step by step explanation Barlow Company is considering two capital investments. Both investments have an inital
please help me figute out how to answer with step by step explanation
Barlow Company is considering two capital investments. Both investments have an inital cost of $8,000,000 and total net cash inflows of $15,000,000 over 10 years. Baric tequires a 14\% rate of return on this type of investment. Expected net cash inflows are as follows (Click the icon to view the expected net cash inflows) Read the resunements Requirement 1. Use Excel to compute the NPV and IRR of the two plans. Which plan, if any, should the company pursue? (Use parentheses or a minus sign for a negative NPV Round the NPV calculations to the nearest whole dolla and the IRR calculations to two decimal places, XX% ) The NPV (net present value) of Plan Alpha is The NPV (net present value) of Plan Beta is The IRR (internal rate of retum) of Plan Apha is The IRR (internai rate of return) of Pian Beta is Which plan, A any, shoud the conpany pursue? Based on the results above, the compary should putsue_ because the NPV is and the IRR is the companys required rate of retam. Requirement 2. Explan the rebtionship between NPV and IRR Based on this relatonsh a and the compariys required rate of return, are your answers as expected in Requinement 1 ? Wiy or why not? The menai rale of return is the iriteest rato that makes the net present value of an invesiment Thus, if an investment's net present value is pontive, the internal rove of rotirn in the required rate of return and if the net present value is negative, the interrat rate of return is Requirement 2. Explain the relationship between NPV and IRR. Based on this relationship and the corrpany's required rate of returm, are your answers as expected in Requirement 17 Why or why not? The internal rate of return is the interest rate that makes the net present value of an investrnent Thus, if an investment's net present value is positve, the internal rate of retum is the required rate of return and is the net present value is negative, the internal rate of return is required rate of retum Based on this relationstip and the company's requied rate of retum, are your answers as expected in Requrement 17 Why or why not? Based on the relationship descnbed above, the intemal rate of return and net present value calculated in Requirement 1 for the two plans Aphax, the net present value is and the intemal rate of refum is the required rate of return. For Plan Beta, the net present value is the internat iale of return is the required rate of refum Kequirement 3. Ater turther negotiating, the company can now invest win an intial cost of $1,600,000 tor both pians. Recalculate the Ni-V and ike Which plan, if any, should the company pursue? (Use Excel to determine your answers. Use parentheses or a minus sign for a negative NPV/ Round the NPV calculations to the nearest whdollar and the IRR calculations to two decimal places, XX% ) The NPN (net present value) of Plan Alpha is $ The NPV (net present value) of Plan Beta is $ The IRR (internal rate of return) of Plan Alpha is The IRR (internal rate of return) of Pian Beta is Which plan, It any, should the company pursue? A. If the compary has sulticicnt resources and the plans are not mutually exclusive, it should pursue both plans because the NPV is posative and the IRR is greater than the company's required rate of return for both plans if the compary must choose only one plan, it should pirsue Plan Alpha because it has the lower NPV and IRR B. The company should not pursue ether plan because the NPV is postive and the hav is greater than the company's required rate of return for both plans C. The company should not pursue ethes plan because the NPV is negative and the IRR is less than the cocipany's required rate of retim for both plans D. It the company has sulfioent resources and the plans are not mutually exclusive, it should pursue both plans because the NPP is positive and the IRR is greater than the company's tequired rate of retum for both plans is the company must choose only cne plan, it should pursue Plan Beta because it has the higher NPV and Barlow Company is considering two capital investments. Both investments have an inital cost of $8,000,000 and total net cash inflows of $15,000,000 over 10 years. Baric tequires a 14\% rate of return on this type of investment. Expected net cash inflows are as follows (Click the icon to view the expected net cash inflows) Read the resunements Requirement 1. Use Excel to compute the NPV and IRR of the two plans. Which plan, if any, should the company pursue? (Use parentheses or a minus sign for a negative NPV Round the NPV calculations to the nearest whole dolla and the IRR calculations to two decimal places, XX% ) The NPV (net present value) of Plan Alpha is The NPV (net present value) of Plan Beta is The IRR (internal rate of retum) of Plan Apha is The IRR (internai rate of return) of Pian Beta is Which plan, A any, shoud the conpany pursue? Based on the results above, the compary should putsue_ because the NPV is and the IRR is the companys required rate of retam. Requirement 2. Explan the rebtionship between NPV and IRR Based on this relatonsh a and the compariys required rate of return, are your answers as expected in Requinement 1 ? Wiy or why not? The menai rale of return is the iriteest rato that makes the net present value of an invesiment Thus, if an investment's net present value is pontive, the internal rove of rotirn in the required rate of return and if the net present value is negative, the interrat rate of return is Requirement 2. Explain the relationship between NPV and IRR. Based on this relationship and the corrpany's required rate of returm, are your answers as expected in Requirement 17 Why or why not? The internal rate of return is the interest rate that makes the net present value of an investrnent Thus, if an investment's net present value is positve, the internal rate of retum is the required rate of return and is the net present value is negative, the internal rate of return is required rate of retum Based on this relationstip and the company's requied rate of retum, are your answers as expected in Requrement 17 Why or why not? Based on the relationship descnbed above, the intemal rate of return and net present value calculated in Requirement 1 for the two plans Aphax, the net present value is and the intemal rate of refum is the required rate of return. For Plan Beta, the net present value is the internat iale of return is the required rate of refum Kequirement 3. Ater turther negotiating, the company can now invest win an intial cost of $1,600,000 tor both pians. Recalculate the Ni-V and ike Which plan, if any, should the company pursue? (Use Excel to determine your answers. Use parentheses or a minus sign for a negative NPV/ Round the NPV calculations to the nearest whdollar and the IRR calculations to two decimal places, XX% ) The NPN (net present value) of Plan Alpha is $ The NPV (net present value) of Plan Beta is $ The IRR (internal rate of return) of Plan Alpha is The IRR (internal rate of return) of Pian Beta is Which plan, It any, should the company pursue? A. If the compary has sulticicnt resources and the plans are not mutually exclusive, it should pursue both plans because the NPV is posative and the IRR is greater than the company's required rate of return for both plans if the compary must choose only one plan, it should pirsue Plan Alpha because it has the lower NPV and IRR B. The company should not pursue ether plan because the NPV is postive and the hav is greater than the company's required rate of return for both plans C. The company should not pursue ethes plan because the NPV is negative and the IRR is less than the cocipany's required rate of retim for both plans D. It the company has sulfioent resources and the plans are not mutually exclusive, it should pursue both plans because the NPP is positive and the IRR is greater than the company's tequired rate of retum for both plans is the company must choose only cne plan, it should pursue Plan Beta because it has the higher NPV and Step by Step Solution
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