Question 1: Salalalh Methanol company management is considering three competinginvestment Projects A, B & C_YearInitial Investment1Project AProject BProject C1200012000120001200310041505260522582503800736092759300446009460Assume a discount Rate of 5.45 %Use the information above and help the management in choosing the most desirableProject using Payback period, Discounted payback Net Present value andProfitability Index. Out of the four methods which is considered to be the mostdesirable. Explain

Answered: Image /qna-images/answer/d5ce4dea-d872-4982-b5a5-0b2593973aa7.jpg

Question 1: Salalalh Methanol company management is considering three competing investment Projects A, B & C Year Initial Investment 1 Project B 12000 4150 Project A 12000 Project C 12000 1200 5225 8250 5260 7360 9460 2 3100 3800 9275 4600 Assume a discount Rate of 5.45 % 4 9300 Use the information above and help the management in choosing the most desirable Project using Payback period, Discounted payback Net Present value and Profitability Index. Out of the four methods which is considered to be the most desirable. Explain

Question 1: Salalalh Methanol company management is considering three competing investment Projects A, B & C Year Initial Investment 1 Project B 12000 4150 Project A 12000 Project C 12000 1200 5225 8250 5260 7360 9460 2 3100 3800 9275 4600 Assume a discount Rate of 5.45 % 4 9300 Use the information above and help the management in choosing the most desirable Project using Payback period, Discounted payback Net Present value and Profitability Index. Out of the four methods which is considered to be the most desirable. Explain

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Question 1: Salalalh Methanol company management is considering three competing investment Projects A, B & C Year Initial Investment Project A Project B 12000 4150 5260 Project C 12000 12000 1200 3100 5225 3 4 Assume a discount Rate of 5.45 % 3800 4600 7360 9460 8250 9275 9300 Use the information above and help the management in choosing the most desirable Project using Payback period
Assignment Exercise A1) Salalah company management is considering two competing investment Projects A and B. Project A 1000 Year Project B Initial Investment 1000 1 275 300 275 300 275 300 4 275 300 5 275 300 DISCOUNT RATE 3.15% Q1) Use the information below and help the management in choosing the monst desirable Project using all the following techni 4) Profitability Index Technique. Q2) Based on your solution or answer to question 1, comment as to which proposal is better and why? بناءً على حلك أو إجابتك على السؤال 1 ، قم بالتعليق على أي اقتراح أفضل ولماذا؟
SNA company management is considering two competing investment Projects A and B. Year Project A Project B Initial Investment 1000 1000 1 275 300 2 275 300 3 275 300 4 275 300 5 275 300 DISCOUNT RATE 3.15% help management to choose the most desirable Project .You must use each technique from 1 to 4 and get the answer? 1)Payback Period Technique.2) Discounted Payback Period Technique.3) Net Present Value Technique4) Profitability Index Technique.
Assignment Exercise A1) Salalah company management is considering two competing investment Projects A and B. Project A 1000 Project B 1000 Year Initial Investment 1 275 300 275 300 275 300 4 275 300 300 5 275 DISCOUNT RATE 3.15% Q1) Use the information below and help the management in choosing the most desirable Project using all the following technique: استخدم المعلومات الواردة أدناه وساعد الإدارة في اختيار المشروع الأكثر رواجا باستخدام جميع الأساليب التالية 1) Payback Period Technique. 2) Discounted Payback Period Technique. 3) Net Present Value Technique 4) Profitability Index Technique. Q2) Based on your solution or answer to question 1, comment as to which proposal is better and why? بناءً على حلك أو إجابتك على السؤال 1 ، قم بالتعليق على أي اقتراح أفضل ولماذا؟
Question 3 Given 10% discount rate, what is the profitability index of the investment project described below? 1.00 0.90 0.95 1.03 1.09 Question 4 What is the best method to use when expressing investment profitability as a percentage? Pick from the answers given below. Payback period Discounted payback period NPV AAR IRR
Asgnment Exercise A1) Salalah company management is considering two competing investment Projects A and B. Project A 1000 Project B 1000 Year Initial Investment 1 275 300 275 300 3 275 300 4 275 300 275 300 DISCOUNT RATE 3.15% Q1) Use the information below and help the management in choosing the most desirable Project using all the following technique: Payback Period Technique. 1) Discounted Payback Period Technique. 2) Net Present Value Technique 3) Profitability Index Technique. Q2) Based on your solution or answer to question 1, comment as to which proposal is better and why?
Suppose the following two independent investment opportunities are available to a company. The appropriate discount rate is 8 percent. Year O 1 2 3 Project Alpha -$4,500 b. 2,300 2,200 1,450 a. Compute the profitability index for each of the two projects. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Project Alpha Project Beta Project Beta -$ 6,100 1,350 4,500 4,000 Profitability Index Which project(s), if either, should the company accept based on the profitability index rule? Project Alpha O Project Beta Neither project O Both projects
company management is considering three competing investment Projects A, B & C Project A 10000 Year Initial Investment Project B 10000 Project C 10000 1100 4160 6225 1 2 3100 5260 8250 3800 7360 9275 4 4600 9460 9300 Assume a discount Rate of 4.05% Use the information above and help the management in choosing the most desirable Project using Payback period, Discounted payback Net Present value and Profitability Index. Out of the four methods which is considered to be the most desirable. Explain
Salalah company management is considering two competing investment Projects A and B. Project A Project B 1000 Year Initial Investment 1000 1 275 300 275 300 275 300 4 275 275 300 5 300 DISCOUNT RATE 3.15% Using the net present value technique method
Salalah company management is considering two competing investment Projects A and B.YearInitial Investment 12345Project A 8000 2750 2750 2750 2750 2750Project B 8000 3000 3000 3000 3000 3000DISCOUNT RATE 5.05%Q1) Use the information below and help the management in choosing the most desirable Project using all the following techniques:1) Payback Period Technique.2) Discounted Payback Period Technique.3) Net Present Value Technique4) Profitability Index Technique.Q2) Based on your solution or answer to question 1, comment as to which proposal is better and why?
Salalah company management is considering two competing investment Projects A and B.YearInitial Investment 12345Project A 8000 2750 2750 2750 2750 2750Project B 8000 3000 3000 3000 3000 3000DISCOUNT RATE 5.05%Q1) Use the information below and help the management in choosing the most desirable Project using all the following techniques:1) Payback Period Technique.2) Discounted Payback Period Technique.3) Net Present Value Technique4) Profitability Index Technique. Q2) Based on your solution or answer to question 1, comment as to which proposal is better and why?
Questior The Bornova Innovation Company has three emerging technology options to invest. The mvestment options and market conditions for these technologies are given below. Based on this information; Investment Options Market Conditions Investment Revenue Emerging Technology Cost Demand Forecasting Probability (1000TL) (1000TL) Strong 0.6 9000 A 8000 Weak 0.4 6000 Strong 0.7 8000 В 6500 Weak 0.3 5000 Strong 0.8 6000 5000 Weak 0.2 3000 a. Draw the decision tree, b. Find the expected monetary value (EMV) of each options c. Which technology option should be selected? Why?