Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 3 (15 marks) (a) Two new financial plans are proposed to a young start-up company. Plan A will cost $250,000 to implement and is

image text in transcribed

Question 3 (15 marks) (a) Two new financial plans are proposed to a young start-up company. Plan A will cost $250,000 to implement and is expected to have annual net cash flows of $75,000. Plan B will cost $150,000 to implement and should generate annual net cash flows of $52,000. The company is very concerned about their cash flow. The life of the proposed projects are 5 years. (1) Use the payback period to determine which plan is better, from a cash flow standpoint? (3 marks) (ii) If the required rate of return is 0.1, conduct a discounted cash flow calculation to determine which plan is better (4 marks) (iii) What are some advantages and disadvantages of the profit profitability numeric models? (3 marks) (b) A sales project at month 5 had an actual cost of $34,000, a planned cost of $42,000, and a value completed of $39,000 (1) Find the cost, schedule variances and the cost-schedule index. (3 marks) (ii) Comment on the project performance. (2 marks) Rubrics and Marking: Totally 15 marks, and the marks for each sub-question are shown after the question. Marks will be given by the ability to apply methods for project selection and monitoring

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Investing All In One For Dummies

Authors: Eric Tyson

2nd Edition

1119873037, 978-1119873037

More Books

Students also viewed these Finance questions

Question

g. Demand increases and supply decreases.

Answered: 1 week ago

Question

Discuss the different types of leadership

Answered: 1 week ago

Question

Write a note on Organisation manuals

Answered: 1 week ago

Question

Define Scientific Management

Answered: 1 week ago

Question

Explain budgetary Control

Answered: 1 week ago