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To avoid rejecting projects that actually should be accepted, 1 . intangible benefits should be ignored. 2 . conservative estimates of the ignored. 3 .
To avoid rejecting projects that actually should be accepted, intangible benefits should be ignored.
conservative estimates of the ignored.
into the NPV calculation.
a
b negative, estimate whether the intangible bele benefits and then, if the NPV is of the negative NPV
c
d both and are correct.
Using the profitability index method, the present value of cash inflows for Project Flower is $ and the present value of cash inflows of Project Plant is $ If respectively, and Project Plant require initial investments of $ and $ a Project Flower.
b Project Plant
c Either project may be accepted
d Neither project should be accepted.
If a company's required rate of return is and, in using the net present value a prod, a project's net present value is zero, this indicates that the
a project's rate of return exceeds
c project's rate of return is less than the rearns a rate of return of
d project earns a rate of return of
Chapman with a proposal to units. Chapman is currently to sell the company widgets at a price of $ for costs are associated with this making these components in its own factory. The following
Direct labour Manufacturing overn
tableTotalmanufacturing overhead consist $
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