Question
Year Investment A Investment B Investment C Investment D Investment E Investment Z 0 -300,000$ -380,000$ -420,000$ -500,000$ -360,000$ -320,000$ 1 60,000$ 90,000$ 100,000$ 160,000$
Year | Investment A | Investment B | Investment C | Investment D | Investment E | Investment Z |
0 | -300,000$ | -380,000$ | -420,000$ | -500,000$ | -360,000$ | -320,000$ |
1 | 60,000$ | 90,000$ | 100,000$ | 160,000$ | 50,000$ | 80,000$ |
2 | 70,000$ | 90,000$ | 140,000$ | 140,000$ | 110,000$ | 80,000$ |
3 | 70,000$ | 90,000$ | 60,000$ | 120,000$ | 150,000$ | 80,000$ |
4 | 70,000$ | 90,000$ | 60,000$ | 100,000$ | 170,000$ | 80,000$ |
5 | 100,000$ | 90,000$ | 140,000$ | 80,000$ | 12,000$ | 80,000$ |
6 | 80,000$ | 90,000$ | 100,000$ | 60,000$ | 12,000$ | 80,000$ |
Using this information and taking into consideration that the cost of capital is 7%, you are required to: a) Rank the investments according to their Net Present Value (NPV) and Internal Rate of Return (IRR). Demonstrate your calculations. b) If the available funds for investments are 840.000, which investments you would recommend for ABC-Logistics? Explain your recommendations. c) If the available funds for investments are 1.280.000, which investments you would recommend for ABC-Logistics? Explain your recommendations. d) Rank the investments according to the Simple Payback method. If ABC has an accepted Payback period of 4 years, which investments would be considered as acceptable? Demonstrate your calculations.
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