Problem B: A firm must choose from six capital budgeting proposals outlined below.  The firm is subject to capital rationing and has a capital budget of Php 1,000,000; the firm's cost of capital is 15%. Project          Initial Investment(Php)       IRR        NPV (Php)   _______          __________________            ___                 ______         1                    200,000                    19%               100,000     2                   400,000                      17%                20,000     3                  250,000                      16%                 60,000     4                  200,000                      12%                  (5,000)     5                  150,000                     20%                  50,000    6                    400,000                    14.5%              150,000   *Using Internal Rate of Return approach of ranking projects, which projects should the firm accept?

a hata eraian is cures Graiki Rim nows an Com 106

The Basics of Capital Budgeting Your division is considering two projects with the following cash flows (in millions):   0 1 2 3                         Project A -$31 $7 $12 $22 Project B -$19 $13 $6 $5 What are the projects' NPVs assuming the WACC is 5%? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. Project A:    $___   million Project B:    $___   million   What are the projects' NPVs assuming the WACC is 10%? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. Project A:  $___   million Project B:  $___   million   What are the projects' NPVs assuming the…

Revenues generated by a new fad product are forecast as follows: Year Revenues 1 $50,000 2 35,000 3 30,000 4 20,000 Thereafter 0 Expenses are expected to be 40% of revenues, and working capital required in each year is expected to be 20% of revenues in the following year. The product requires an immediate investment of $60,000 in plant and equipment. a. What is the initial investment in the product? Remember working capital. b. If the plant and equipment are depreciated over 4 years to a salvage value of zero using straight-line depreciation, and the firm’s tax rate is 20%, what are the project cash flows in each year? Assume the plant and equipment are worthless at the end of 4 years. c. If the opportunity cost of capital is 10%, what is the project's NPV? d. What is the project IRR?