US complete HW Score: 0% 0 of 19 Mini Case. Chapter 10 (similar to) Question Help You fit ment in your new position assistant financial analyst at Caledonia Products is to evaluate two new capital budgeting proposals. Because this is your first assignment, you have been asked cry to provide a recommendation but also to respond to number of questions and assessing your understanding of the capitbudgeting process. This is a standard procedure for at new francalayssa Ca, and it wil veto delermine whether you are moved directly into the capitbudgeting analysis department or are provided with remedial training. The memorandums you received autining your mentos To Now Fra Analyst From MV Moon, CEO, Caledonia Products Re Capital Budgeting Analysis Provide an evaluation of two groped projects, both with your expected and identical outlays of $150,000. Both of the projects inolve addition to Caldo's sucosalon product in and as out the required rate of return on both shas been established 11 percent. The expected the cash flows from each project are shown in the top window.am he these proda, please respond to the following questions: a. The capital budgeting process is somportant becacat buying decision masteringer par course of action over in relatively time horton Select from the drop-down menu cashottays at the beginning of the We of project and comment Click to see your answers and then dick Check An 23 C Type here to search 112 PM P F . K c B N M jal analyst at Caledonia Products is to evaluate two new capital-budgeting proposals. Because this is umber of questions aimed at assessing your understanding of the capital-budgeting process. This is a s Then Data Table (Click on the following icon in order to copy its contents into a spreadsheet.) sh acts wwwin sto Calec he popup Initial outlay Inflow year 1 Inflow year 2 Inflow year 3 Inflow year 4 Infion year 5 PROJECTA - $150,000 10,000 30,000 40,000 60,000 80,000 PROJECTB - $150,000 40,000 40,000 40,000 40,000 40,000 auso finning of the Print Done Check Answer Clear All o Gle presc home en 4 ( 5 6 7 00 9 0 E R T Y 6 E c Mini Case. Chapter 10 (similar to) In evaluating these projects, please respond to the following questions a. Why is the capital-budgeting process so important? b. Why is it difficult to find exceptionally profitable projects? c. What is the payback period on each project? If Caledonia imposes a 4-year maximum acceptable payback period, which of these projects should be accepted? d. What are the criticisms of the payback period? e. Determine the NPV for each of these projects. Should other project be accepted? 1. Describe the logic behind the NPV. 9. Determine the P for each of these projects. Should either project be accepted? h. Would you expect the NPV and Pl methods to give consistent accept reject decisions? Why or why not? What would happen to the NPV and Pl for each project if the required rate of return increased? If the required rate of return decreased? Determine the IRR for each project. Should either project be accepted? k. How does a change in the required rate of return affect the project's internal rate of return? LWhat reinvestment rate assumptions are implicitly made by the NPV and IRR methods? Which one is better? a. The capital-budgeting process is so important because capital-budgeting decisions involve investments requiring rather cash outlays at the beginning of the life of the project particular course of action over a relatively time horizon (Select from the drop-down menus.) Click to select your answer(s) and then click Check Answer 23 porte remaining Clear All Fin Type here to search O RI > B 3 E 20 US complete HW Score: 0% 0 of 19 Mini Case. Chapter 10 (similar to) Question Help You fit ment in your new position assistant financial analyst at Caledonia Products is to evaluate two new capital budgeting proposals. Because this is your first assignment, you have been asked cry to provide a recommendation but also to respond to number of questions and assessing your understanding of the capitbudgeting process. This is a standard procedure for at new francalayssa Ca, and it wil veto delermine whether you are moved directly into the capitbudgeting analysis department or are provided with remedial training. The memorandums you received autining your mentos To Now Fra Analyst From MV Moon, CEO, Caledonia Products Re Capital Budgeting Analysis Provide an evaluation of two groped projects, both with your expected and identical outlays of $150,000. Both of the projects inolve addition to Caldo's sucosalon product in and as out the required rate of return on both shas been established 11 percent. The expected the cash flows from each project are shown in the top window.am he these proda, please respond to the following questions: a. The capital budgeting process is somportant becacat buying decision masteringer par course of action over in relatively time horton Select from the drop-down menu cashottays at the beginning of the We of project and comment Click to see your answers and then dick Check An 23 C Type here to search 112 PM P F . K c B N M jal analyst at Caledonia Products is to evaluate two new capital-budgeting proposals. Because this is umber of questions aimed at assessing your understanding of the capital-budgeting process. This is a s Then Data Table (Click on the following icon in order to copy its contents into a spreadsheet.) sh acts wwwin sto Calec he popup Initial outlay Inflow year 1 Inflow year 2 Inflow year 3 Inflow year 4 Infion year 5 PROJECTA - $150,000 10,000 30,000 40,000 60,000 80,000 PROJECTB - $150,000 40,000 40,000 40,000 40,000 40,000 auso finning of the Print Done Check Answer Clear All o Gle presc home en 4 ( 5 6 7 00 9 0 E R T Y 6 E c Mini Case. Chapter 10 (similar to) In evaluating these projects, please respond to the following questions a. Why is the capital-budgeting process so important? b. Why is it difficult to find exceptionally profitable projects? c. What is the payback period on each project? If Caledonia imposes a 4-year maximum acceptable payback period, which of these projects should be accepted? d. What are the criticisms of the payback period? e. Determine the NPV for each of these projects. Should other project be accepted? 1. Describe the logic behind the NPV. 9. Determine the P for each of these projects. Should either project be accepted? h. Would you expect the NPV and Pl methods to give consistent accept reject decisions? Why or why not? What would happen to the NPV and Pl for each project if the required rate of return increased? If the required rate of return decreased? Determine the IRR for each project. Should either project be accepted? k. How does a change in the required rate of return affect the project's internal rate of return? LWhat reinvestment rate assumptions are implicitly made by the NPV and IRR methods? Which one is better? a. The capital-budgeting process is so important because capital-budgeting decisions involve investments requiring rather cash outlays at the beginning of the life of the project particular course of action over a relatively time horizon (Select from the drop-down menus.) Click to select your answer(s) and then click Check Answer 23 porte remaining Clear All Fin Type here to search O RI > B 3 E 20