A company is considering two alternative investment projects both of which have a positive net present value. The projects have been ranked on the basis of both net present value (NPV) and internal rate of return (IRR). The result of the ranking is shown below: Project A Project B NPV 1st 2nd IRR 2nd 1st Discuss any four (4) potential reasons why the conflict between the NPV and IRR ranking may have arisen B. Kumi Ltd is considering an investment in a project, which requires immediate payment of GHS15,000, followed by a further investment of GHS5,400 at the end of the first year. The subsequent return phase net cash inflows are expected to arise at the end of the following years: Year 1 2 3 4 5 Cash inflow (GHS) 6,500 7,750 5,750 4,750 3,750 You are required to estimate the internal rate of return of this project assuming the company’s cost of capital of 16%.

Devril plc is considering the investment in a project that has an initial cash outlay followed by a series of net cash inflows. The business applied the NPV and IRR methods to evaluate the proposal but, after the evaluation had been undertaken, it was found that the correct cost of capital figure was lower than that used in the evaluation. What will be the effect of correcting for this error on the NPV and IRR figures? a. NPV Increase IRR Decrease Ob. NPV Increase IRR Increase OC. NPV Decrease IRR Decrease d. NPV Decrease IRR No change Oe. NPV Increase IRR No Change Jump to... 1 Academic Integrity

I need help matching the defintions with the words, thank you.

P7.2 (LO 2, 3), AN As a supervisor in Wealth Health Services, you oversee the investment activity of a number of clients as well as train interns and new staff in the company. Cole, a college junior, is in just the second week of his 12-week internship. He is helping a client evaluate an asset replacement decision while following a similar example from a different client. He presents the asset replacement information, along with his analysis to you, as follows. Original cost of existing asset Market value of existing asset today Book value of existing asset today $ 80,000 $ 5,000 $ 5,000 New replacement asset cost $150,000 New replacement asset useful life (years) Estimated salvage value of new replacement asset at end of useful life Estimated additional operating cash inflows from new replacement asset 10 $ 5,000 $ 25,000 Minimum required return 10% Effective tax rate 28% Cole's Analysis Proceeds from sale of existing asset Cost of new replacement asset $ 5,000 $ (150,000) Present…

I need solutions for questions d, e, f, g, h and i. Thanks d. Are this project’s cash flows likely to be positively or negatively correlated withreturns on Cory’s other projects and with the economy, and should this matter in youranalysis? Explain.e. Unrelated to the new product, Cory is analyzing two mutually exclusive machines thatwill upgrade its manufacturing plant. These machines are considered average-riskprojects, so management will evaluate them at the firm’s 10% WACC. Machine Xhas a life of 4 years, while Machine Y has a life of 2 years. The cost of each machineis $60,000; however, Machine X provides after-tax cash flows of $25,000 per year for4 years and Machine Y provides after-tax cash flows of $42,000 per year for 2 years. Themanufacturing plant is very successful, so the machines will be repurchased at the endof each machine’s useful life. In other words, the machines are “repeatable” projects.1. Using the replacement chain method, what is the NPV of the better machine?2.…

Mike Riskless is considering two projects. He has estimated the IRR for each under three possible scenarios and assigned probabilities of occurrence to each scenario.   State of Economy Probability Estimated BTIRR Investment I Estimated BTIRR Investment II Optimistic 0.20 0.15 0.20 Most likely 0.60 0.10 0.15 Pessimistic 0.20 0.05 0.05   1.00       Riskless is aware that the pattern of returns for Investment II looks very attractive relative to Investment I; however, he believes that Investment II could be more risky than Investment I. He would like to compare the two investments considering both the risk and return on each.   Required: a. Compute BTIRR under each of the three possible scenarios. b. Compute variance and standard deviation of the IRRs.

Managers can choose from several analytical techniques to help them make capital investment decisions. Each technique has advantages and disadvantages.   Respond to the following in a minimum of 175 words:  Provide an example or brief business case in which you can apply the NPV, IRR or payback concepts to make the most adequate financial decision.  Select one of the techniques - NPV, IRR, or payback and explain why you would choose this technique as well as any disadvantages when compared to the others.

You are considering an investment that will pay you $1,200 per month for three years. The first payment occurs one month from today. What is the present value of this investment if the annual percentage rate is 12 percent?

explain that when developing a working capital policy, the entrepreneur determines the joint impact of the level of working capital investment and financing on profitability and risk,and Compare the three alternative working capital policies. Which policy would you consider implementing should you want a venture to show a higher expected profitability?

Which of the following statements is (are) FALSE? Select one or more alternatives: When sales of a new product displace sales of an existing product, the situation is often referred to as cannibalisation. If the IRR of a project is equal to the cost of capital, the NPV will be zero. It is reasonable to assume that a business has a terminal growth rate higher than the long-term growth rate of the economy. The terminal growth rate is the growth rate used to estimate the terminal value of a business. Interest expenses from borrowing should be subtracted from EBIT to estimate free cash flow to firm.