{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-05-19T09:04:09-04:00", "answer_date": "2024-05-19 09:04:09", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "1316914", "url": "\/study-help\/questions\/tesla-inc-must-decide-where-to-allocate-3-million-which-1316914", "question_creation_date_js": "2024-05-19T09:04:09-04:00", "question_creation_date": "May 19, 2024 09:04 AM", "meta_title": "[Solved] Tesla Inc must decide where to allocate $ | SolutionInn", "meta_description": "Answer of - Tesla Inc must decide where to allocate $3 million, which is available for immediate investment. It has four EV projec | SolutionInn", "meta_keywords": "tesla,inc,decide,allocate,$3,million,immediate,investment,four,ev,projects,choose", "question_title_h1": "Tesla Inc must decide where to allocate $3 million, which is available for immediate investment. It has four EV projects from which to choose (all", "question_title": "Tesla Inc must decide where to allocate $3 million, which is available", "question_title_for_js_snippet": "Tesla Inc must decide where to allocate $3 million, which is available for immediate investment It has four EV projects from which to choose (all cash flows in millions) and has decided to use the net present value and profitability index approaches when deciding how to allocate these funds Disregard the difference in project lives The cost of capital is 10 YearModel 3Model SModel XModel Y 0 $1 $2 $3 $1 5 1 $1$1$4$0 9 2$1$1 $0 9 3 $1 $0 9 Required What is the net present value for each project and which projects are acceptable (3 marks) What is the profitability index for each project and which projects are acceptable (3 marks) Given the capital constraint, which project or projects do you select and why (5 marks) How much value does Tesla add to itself by undertaking this project or projects How does this differ if there was no capital constraint (4 marks)", "question_description": "

Tesla Inc must decide where to allocate $3 million, which is available for immediate investment. It has four EV projects from which to choose (all cash flows in millions) and has decided to use the net present value and profitability index approaches when deciding how to allocate these funds. Disregard the difference in project lives. The cost of capital is 10%.<\/p>

YearModel 3Model SModel XModel Y<\/p>

0-$1-$2-$3-$1.5<\/p>

1 $1$1$4$0.9<\/p>

2$1$1-$0.9<\/p>

3 -$1-$0.9<\/p>

<\/p>

Required:<\/p>

  1. What is the net present value for each project and which projects are acceptable? (3 marks)<\/li>
  2. What is the profitability index for each project and which projects are acceptable? (3 marks)<\/li>
  3. Given the capital constraint, which project or projects do you select and why? (5 marks)<\/li>
  4. How much value does Tesla add to itself by undertaking this project or projects? How does this differ if there was no capital constraint? (4 marks)<\/li> <\/ol>", "transcribed_text": "", "related_book": { "title": "Financial Accounting", "isbn": "978-0071284714, 9780077300333, 71284710, 77300335, 978-0073526881", "edition": "6th Edition", "authors": "Libby, Short", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/143.jpg", "uri": "\/textbooks\/financial-accounting-6th-edition-143", "see_more_uri": "" }, "free_related_book": { "isbn": "9783319117904", "uri": "\/textbooks\/design-of-switched-capacitor-filter-circuits-using-low-gain-amplifiers-1st-edition-9783319117904", "name": "Design Of Switched Capacitor Filter Circuits Using Low Gain Amplifiers", "edition": "1st Edition" }, "question_posted": "2024-05-19 09:04:09", "see_more_questions_link": "\/study-help\/questions\/business-management-leadership-2023-June-05", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/study-help\/questions\/please-complete-no-later-than-1104-8am-each-question12-3-2989437", "description": "PLEASE COMPLETE NO LATER THAN 11\/04 @8am Each question(1,2,& 3) must be a minimum of 200 words. 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