Answered step by step
Verified Expert Solution
Question
1 Approved Answer
You are a project manager for your company and you are faced with six potential projects that you can invest in Free cash flow projections
You are a project manager for your company and you are faced with six potential projects that you can invest in Free cash flow projections and additional relevant data are given for each project in the table below. Assume that there are no cash flows after year 3. Assume that you can only take each project once and that you can only choose one project. Which project would you invest in? Select the best answer RR Project Project A Project B Project Project D Project Project FCF Forecasts by Year (in $1,000) Interest Rate 0 1 2 3 (EAR) (480) (20) 270 420 10% (420) 430 50 0 10% (350) 80 120 200 10% (4001 (50) 150 19 (490) 230 240 200 18 (200) 260 0 18% 13.45 12.9% 50 13 6N 17 94 30 ON Payback Period 3 Years 1 Year 3 Years 3 Years 3 Years 1 Year 480 O Project A O Project B Project C IV. Project O v Projecte V Project LLLLLLL s points SA Your firm has a choice of investing in a number of different projects. The Table below provides information on the individual projects. Assume that your firm has enough cash to invest in all projects, but your firm is constrained in the total amount of electricity it can consume Specifically, it can only afford to allocate 20,000 kilowatt-hours (kWh) across different projects. Which combination of projects should it choose? Select the best one. Project Initial investment NPV (in $1000) Electricity (in $1000) Consumption (in kWh) A B C D E F 50,000 16,000 50,000 50,000 80,000 8,000 100,000 75,000 22.000 25,000 18,000 65,000 120,000 35,000 95,000 80,000 5.000 3,000 5,000 5,000 20,000 5,000 7,000 15,000 G H OL Projects A B D and F Oil Projects B, C, D, F, and G It Projects A B, C, and G IV Projects B, D, F, and G O v Project E You are a project manager for your company and you are faced with six potential projects that you can invest in Free cash flow projections and additional relevant data are given for each project in the table below. Assume that there are no cash flows after year 3. Assume that you can only take each project once and that you can only choose one project. Which project would you invest in? Select the best answer RR Project Project A Project B Project Project D Project Project FCF Forecasts by Year (in $1,000) Interest Rate 0 1 2 3 (EAR) (480) (20) 270 420 10% (420) 430 50 0 10% (350) 80 120 200 10% (4001 (50) 150 19 (490) 230 240 200 18 (200) 260 0 18% 13.45 12.9% 50 13 6N 17 94 30 ON Payback Period 3 Years 1 Year 3 Years 3 Years 3 Years 1 Year 480 O Project A O Project B Project C IV. Project O v Projecte V Project LLLLLLL s points SA Your firm has a choice of investing in a number of different projects. The Table below provides information on the individual projects. Assume that your firm has enough cash to invest in all projects, but your firm is constrained in the total amount of electricity it can consume Specifically, it can only afford to allocate 20,000 kilowatt-hours (kWh) across different projects. Which combination of projects should it choose? Select the best one. Project Initial investment NPV (in $1000) Electricity (in $1000) Consumption (in kWh) A B C D E F 50,000 16,000 50,000 50,000 80,000 8,000 100,000 75,000 22.000 25,000 18,000 65,000 120,000 35,000 95,000 80,000 5.000 3,000 5,000 5,000 20,000 5,000 7,000 15,000 G H OL Projects A B D and F Oil Projects B, C, D, F, and G It Projects A B, C, and G IV Projects B, D, F, and G O v Project E
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started