ABC is evaluating a new project. You are the manager and need to make a decision: Calculate all four capital budgeting techniques A. Net present value, B. Internal rate of return (IRR), C. Payback period for each of the following projects. D. Profitability Index. The firm requires a rate of return of 14 percent Which project(s) should be purchased if they are independent? Which project(s) should be purchased it they are mutually exclusive? Year Project Alpha Project Beta 0 $(270,000) $(300,000) 1 120,000 0 2 120,000 (80,000) 3 120,000 555,000
ABC is evaluating a new project. You are the manager and need to make a decision: Calculate all four capital budgeting techniques A. Net present value, B. Internal rate of return (IRR), C. Payback period for each of the following projects. D. Profitability Index. The firm requires a rate of return of 14 percent Which project(s) should be purchased if they are independent? Which project(s) should be purchased it they are mutually exclusive? Year Project Alpha Project Beta 0 $(270,000) $(300,000) 1 120,000 0 2 120,000 (80,000) 3 120,000 555,000
Related questions
You are a financial analyst for the Brittle Company. The director of capital budgeting has asked you to analyze two proposed capital investments: Projects X and Y. Each project has a cost of $10,000, and the cost of capital for each is 12%. The projectsâ expected net cash flows are shown in the table below.
Expected Net Cash Flows
| Year | Project X | Project Y |
| 0 | â $10,000 | â $10,000 |
| 1 | 6,500 | 3,500 |
| 2 | 3,000 | 3,500 |
| 3 | 3,000 | 3,500 |
| 4 | 1,000 | 3,500 |
Use the Homework Student Workbook to calculate each projectâs net present value (NPV), internal rate of return (IRR), modified internal rate of return (MIRR), and profitability index (PI).
Which project or projects should be accepted if they are independent?
Which project or projects should be accepted if they are mutually exclusive?
You are a financial analyst for the Brittle Company. The director of capital budgeting has asked you to analyze two proposed capital investments: Projects X and Y. Each project has a cost of $10,000, and the cost of capital for each is 12%. The projectsâ expected net cash flows are shown in the table below.
Expected Net Cash Flows
| Year | Project X | Project Y |
| 0 | â $10,000 | â $10,000 |
| 1 | 6,500 | 3,500 |
| 2 | 3,000 | 3,500 |
| 3 | 3,000 | 3,500 |
| 4 | 1,000 | 3,500 |
Use the Homework Student Workbook to calculate each projectâs net present value (NPV), internal rate of return (IRR), modified internal rate of return (MIRR), and profitability index (PI).
Which project or projects should be accepted if they are independent?
Which project or projects should be accepted if they are mutually exclusive?
