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- Based on the information below which projects will we choose based on weighted average profitabiltity Index if we only have OMR500,000 to invest? Project NPV Investment PI A 130,000 200,000 B 241,250 225,000 C 294,250 275,000 D 262,000 250,000 Select one: a. WAPI AD b. WAPI AB c. WAPI BD d. WAPI BCCompute the PI statistic for Project X and note whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 9 percent. Time: 0 1 2 3 4 5 Cash flow: -76 -76 0 111 86 61 rev: 11_25_2016_QC_CS-70617 Multiple Choice 1.49, accept 66.35, accept 9.00, reject 37.21, acceptConsider two projects: A) with casháows in years 0-4 of -300$, 120$, 120$, 120$ and respectively 120$, B) with casháows in years 0-3 of -300$, 150$, 150$ and respectively 150$ 4(a) Assume an opportunity cost of capital of 11%. Which of these projects would you accept, if you use the NPV method? 4(b) Which one would you prefer, among the two, based on their ProÖtability Index (PI)? 4(c) Which one would you choose if the cost of capital is 16%? 5(a) What is the payback period of each project?5(b) Is the project with the shortest payback period also the one with the highest NPV? Explain. 6(a) What are the internal rates of return on the two projects?6(b) Does the IRR rule in this case give the same advice i.e. preferred outcome as NPV?
- You are considering a project X which has cash flows given below: Year 0 Year 1 Year 2 Project X ($7,000) $40,000 ($40,000) Project X has two IRRs, and its cost of capital is 15%. Which of the following statements best describes Project X? (Hint: draw NPV profile) Group of answer choices No matter what its cost of capital is, it should be accepted. No matter what its cost of capital is, it should be rejected. If the cost of capital would be between the two IRRs, it could be accepted. Since both IRRs are greater than its cost of capital, it should be accepted. All of these statements are not consistent with Project X.Better plc is comparing two mutually exclusive projects, whose details are given below.The company’s cost of capital is 12 per cent.Project A Project B£m £mYear 0 (150) (152)Year 1 40 80Year 2 50 80Year 3 60 50Year 4 60 40Year 5 80 30(a). Using the net present value method, which project should be accepted?(b). Using the internal rate of return method, which project should be accepted?(c). If the cost of capital increases to 20 per cent in year 5, would your advice change?Better plc is comparing two mutually exclusive projects, whose details are given below.The company’s cost of capital is 12 per cent.Project A Project B£m £mYear 0 (150) (152)Year 1 40 80Year 2 50 80Year 3 60 50Year 4 60 40Year 5 80 30(a). Using the net present value method, which project should be accepted?(b). Using the internal rate of return method, which project should be accepted?(c). If the cost of capital increases to 20 per cent in year 5, would your advice change? Hello.i have the solution you send me but i am trying to understand where did you get the calculations for in the worknotes tabel. I still cant calculate the IRR.i really dont understand how to do it. Can you help me please by using the numbers in the tabel so i can understand what is that you are adding or taking away please? I know how to calculate the NPV but not the IRR
- Better plc is comparing two mutually exclusive projects, whose details are given below.The company’s cost of capital is 12 per cent.Project A Project B£m £mYear 0 (150) (152)Year 1 40 80Year 2 50 80Year 3 60 50Year 4 60 40Year 5 80 30(a). Using the net present value method, which project should be accepted?(b). Using the internal rate of return method, which project should be accepted?(c). If the cost of capital increases to 20 per cent in year 5, would your advice change? Hello.i have the solution you send me but i am trying to understand where did you get the calculations for in the worknotes tabel. I did my own calculation but i dont get the same answer. Could you show mw the calculation but not in excel please, i need the calculation by formula manuallyBetter plc is comparing two mutually exclusive projects, whose details are given below.The company’s cost of capital is 12 per cent.Project A Project B£m £mYear 0 (150) (152)Year 1 40 80Year 2 50 80Year 3 60 50Year 4 60 40Year 5 80 30(a). Using the net present value method, which project should be accepted?(b). Using the internal rate of return method, which project should be accepted?(c). If the cost of capital increases to 20 per cent in year 5, would your advice change? Hello.i have the solution you send me but i am trying to understand where did you get the calculations for in the worknotes tabel. I still cant calculate the IRR.i really dont understand how to do it. Can you help me please by using the numbers in the tabel so i can understand what is that you are adding or taking away please? I know how to calculate the NPV but not the IRR. I have went over and over this IRR but i still dont understand how you calculate it using the pv and the npv.i dont wanna use excel.Better plc is comparing two mutually exclusive projects, whose details are given below.The company’s cost of capital is 12 per cent.Project A Project B£m £mYear 0 (150) (152)Year 1 40 80Year 2 50 80Year 3 60 50Year 4 60 40Year 5 80 30(a). Using the net present value method, which project should be accepted?(b). Using the internal rate of return method, which project should be accepted?(c). If the cost of capital increases to 20 per cent in year 5, would your advice change? Hello.i have the solution you send me but i am trying to understand where did you get the calculations for in the worknotes tabel. I did my own calculation but i dont get the same answer. For example for year 2 for project A you have 39.8597 How did you get to that without using the formula in excel. I need to write down the actual numbers. I got 22.3214 some im not sure how you got to that number. Can you help me please? Thank you
- Consider two projects: A) with cashlows in years 0-4 of -300$, 120$, 120$, 120$ and respectively 120$, B) with casháows in years 0-3 of -300$, 150$, 150$ and respectively 150$ 4(a) Assume an opportunity cost of capital of 11%. Which of these projects would you accept, if you use the NPV method? 4(b) Which one would you prefer, among the two, based on their ProÖtability Index (PI)? 4(c) Which one would you choose if the cost of capital is 16%? 5(a) What is the payback period of each project?5(b) Is the project with the shortest payback period also the one with the highest NPV? Explain. 6(a) What are the internal rates of return on the two projects?6(b) Does the IRR rule in this case give the same advice i.e. preferred outcome as NPV? please answer only question 5a,b and 6a,b thanksConsider two projects: A) with casháows in years 0-4 of -300$, 120$, 120$, 120$ and respectively 120$, B) with casháows in years 0-3 of -300$, 150$, 150$ and respectively 150$ (a) Assume an opportunity cost of capital of 11%. Which of these projects would you accept, if you use the NPV method? (b) Which one would you prefer, among the two, based on their ProÖtability Index (PI)? (c) Which one would you choose if the cost of capital is 16%?Consider two projects: A) with casháows in years 0-4 of -300$, 120$, 120$, 120$ and respectively 120$, B) with casháows in years 0-3 of -300$, 150$, 150$ and respectively 150$ (a) Assume an opportunity cost of capital of 11%. Which of these projects would you accept, if you use the NPV method? (b) Which one would you prefer, among the two, based on their ProÖtability Index (PI)? (c) Which one would you choose if the cost of capital is 16%? What is the payback period of each project?(a) Is the project with the shortest payback period also the one with the highest NPV? Explain. 6 What are the internal rates of return on the two projects?(a) Does the IRR rule in this case give the same advice i.e. preferred outcome as NPV?