The Carlo Company has been allocated RM600,000 on investment projects for the coming year. Four projects, each with a four year life and with the following cash flows are currently being considered:     Year 0 1 2 3 4 Project RMk RMk RMk RMk RMk A -300 100 10 200 200 B -200 0 0 0 400 C -100 0 0 80 80 D -150 60 60 60 60     Distinguish between hard and soft capital rationing                         Assuming that the projects are divisible recommend to the Board, which projects should be accepted using the Net Present Value method and evaluate the total net present value that would be generated Discuss the impact on your analysis of each project being indivisible

Duo Corporation is evaluating a project with the following cash flows: Year 0 Cash Flow -$ 16,600 1 7,700 2 8,900 3 4 5 8,500 7,300 -4,700 The company uses an interest rate of 11 percent on all of its projects. Calculate the MIRR of the project using all three methods. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Discounting approach Reinvestment approach % % Combination approach %

Badr & Sons. is evaluating 2 (TWO) mutually exclusive investment projects. INITIAL CAPITAL OUTLAY for both projects are as stated in Year 0. The company’s REQUIRED RATE OF RETURN IS 10.50% and sets 2.5 YEARS AS ITS MINIMUM (DESIRED) PAYBACK PERIOD.   Information about cash flows from the project for the next four years is tabulated below:   YEAR PROJECT ALPHA PROJECT BETA 0 SR               -185,000 SR           -145,000 1                        45,000                     41,000 2                        75,000                     45,000 3                        55,000                     55,000 4                        66,000                     70,000   What is PAYBACK PERIOD for PROJECT ALPHA ONLY.?

Bluefield Inc. is considering a project that will require an initial investment of $20,000 and is expected to generate future cash flows of $5,000 for years 1 through 3 and $2,500 for years 4 through 6. The project’s payback period is:   A. 6 years B. 5 years C. 4 years D. 67 years

Duo Corporation is evaluating a project with the following cash flows: Year    Cash Flow0    −$ 29,8001    12,0002    14,7003    16,6004    13,7005    −10,200 The company uses an interest rate of 9 percent on all of its projects. Calculate the MIRR of the project using the discounting approach.

A company is considering two mutually exclusive investments with a discount rate of 10%.The cash flows of the projects over time follows: Time Project A Project B 0 - RM300,000 - RM405,000 1 - RM387,000 RM134,000 2 - RM193,000 RM134,000 3 - RM100,000 RM134,000 4 RM600,000 RM134,000 5 RM600,000 RM134,000 6 RM850,000 RM134,000 7 - RM180,000 RM0 Question: The company does not want to issue new share capital or debentures to financethis project. Recommend three (3) appropriate financing methods for this project.Provide support for your recommendations.

Phoenix Company is considering investments in projects C1 and C2. Both require an initial investment of $234,000 and would yield the following annual net cash flows. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)  Net cash flows Project C1 Project C2 Year 1 $ 14,000 $ 98,000 Year 2 110,000 98,000 Year 3 170,000 98,000 Totals $ 294,000 $ 294,000 a. The company requires a 10% return from its investments. Compute net present values using factors from Table B.1 in Appendix B to determine which projects, if any, should be accepted.b. Using the answer from part a, is the internal rate of return higher or lower than 10% for (i) Project C1 and (ii) Project C2? Hint: It is not necessary to compute IRR to answer this question.

A company is considering two mutually exclusive investments with a discount rate of 10%.The cash flows of the projects over time follows:  Time Project A Project B 0 - RM300,000 - RM405,000 1 - RM387,000 RM134,000 2 - RM193,000 RM134,000 3 - RM100,000 RM134,000 4 RM600,000 RM134,000 5 RM600,000 RM134,000 6 RM850,000 RM134,000 7 - RM180,000 RM0 A. What is the Net Present Value (NPV) for each project?   B. Since the projects are mutually exclusive, which project would you recommend?Justify your recommendation.   C. Suppose that the projects are independent projects, which project (s) would yourecommend? Justify your recommendation.

Given the cash flows of the following two project, which project should the company choose if the company can choose only one of the projects? The cost of capital is 11 percent. Year Project A Project B 0 -$200 -$200 1 80 100 2 80 100 3 80 100 4 80   Options:   Project A   Project B

A company is considering two mutually exclusive investments with a discount rate of 10%.The cash flows of the projects over time follows:  Time Project A Project B 0 - RM300,000 - RM405,000 1 - RM387,000 RM134,000 2 - RM193,000 RM134,000 3 - RM100,000 RM134,000 4 RM600,000 RM134,000 5 RM600,000 RM134,000 6 RM850,000 RM134,000 7 - RM180,000 RM0 Net Present value given :       Time Project A Project B   Project A Project B 0 -300,000 -405,000 1.0000   (300,000.00)   (405,000.00) 1 -387,000 134,000 0.9091   (351,818.18)     121,818.18 2 -193,000 134,000 0.8264   (159,504.13)     110,743.80 3 -100,000 134,000 0.7513     (75,131.48)     100,676.18 4 600,000 134,000 0.6830    409,808.07       91,523.80 5 600,000 134,000 0.6209    372,552.79       83,203.46 6 850,000 134,000 0.5645    479,802.84       75,639.51 7 -180,000 0 0.5132…