Loading...

Messages

Proposals

Stuck in your homework and missing deadline? Get urgent help in $10/Page with 24 hours deadline

Get Urgent Writing Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework & Achieve A+ Grades.

Privacy Guaranteed - 100% Plagiarism Free Writing - Free Turnitin Report - Professional And Experienced Writers - 24/7 Online Support

The investment detective case 17

31/12/2020 Client: saad24vbs Deadline: 3 days

The investment Detective


Answer Q1:


We can rank the projects by simply inspecting the cash flows (mention bellow), yet it’s not a good measure to rank them.


We can’t rank the projects by only simple inspection of the cash flows because of the time value of money and cost of capital of companies. We use capital budgeting tools to measure financial performance of projects.


The Ranking by simply inspecting the cash flows:


Rank


1st


2nd


3rd


4th


5th


6th


7th


8th


Projects


3


5


8


4


1


7


6


2


Cash Flows


$10,000


$4,200


$4,150


$3,561


$3,310


$2,560


$2,200


$2,165


Answer Q2:


In order to rank these projects, in a purely quantitative manner, we used the following for the 8 projects:


A. Net Present Value (NPV)


B. Internal Rate of Return (IRR)


C. Payback Period (PP)


D. Profitability Index (PI)


A. Net Present Value (NPV)


Year


Project 1


Project 2


Project 3


Project 4


Project 5


Project 6


Project 7


Project 8


0


($2,000)


($2,000)


($2,000)


($2,000)


($2,000)


($2,000)


($2,000)


($2,000)


1


300.00


1,514.55


-


145.45


254.55


2,000.00


1,090.91


(318.18 )


2


272.73


276.03


-


165.29


231.40


-


743.80


(49.59)


3


247.93


123.97


-


262.96


210.37


-


225.39


45.08


4


225.39


-


-


269.79


191.24


-


61.47


239.05


5


204.90


-


-


268.24


173.86


-


43.46


434.64


6


186.28


-


-


248.37


158.05


-


-


677.37


7


169.34


-


-


226.82


143.68


-


-


1,154.61


8


466.51


-


-


207.13


130.62


-


-


-


9


-


-


-


189.15


118.75


-


-


-


10


-


-


-


172.72


107.95


-


-


-


11


-


-


-


157.72


98.14


-


-


-


12


-


-


-


143.70


89.22


-


-


-


13


-


-


-


130.64


81.11


-


-


-


14


-


-


-


119.03


73.73


-


-


-


15


-


-


-


-


67.03


-


-


-


S PV(CF)


2,073.086


1,914.545


2,393.920


2,228.222


2,129.702


2,000


2,165.041


2,182.984


NPV


73.086


(85.455)


393.920


228.222


129.702


0


165.041


182.984


Rank


6th


8th


1st


2nd


5th


7th


4th


3rd


B. Internal Rate of Return (IRR)


Projects


Project 1


Project 2


Project 3


Project 4


Project 5


Project 6


Project 7


Project 8


IRR


10.87%


6.31%


11.33%


12.33%


11.12%


10.00%


15.26%


11.41%


Rank


6th


8th


4th


2nd


5th


7th


1st


3rd


All of these projects are accepted except Project 2 because its cost of capital has higher percentage than the percentage project internal rate of return. Moreover, Project 6 will be a subject of be in different because the cost of capital equal to internal rate of return, which lead to break even project.


COC = 10%


C. Payback Period (PP)


In Payback Period there are two method, non-discounted cash flow and discounted cash flow. Drawback of non-discounted cash flow does not consider TVM and the rate of return, and the discounted cash flow does not examine all the cash flows.


Projects


Project 1


Project 2


Project 3


Project 4


Project 5


Project 6


Project 7


Project 8


Payback Year


7


2


15


6


8


1


2


7


Payback


2,310


2,000


10,000


1,977


2,240


2,200


2,100


4,150


Discounted Payback


1,606.58


1,790.58


2,393.92


1,360.10


1,493.78


2,000


1,834.71


2,182.98


Decision (DPP)


Reject


Reject


Accept


Reject


Reject


Be in different


Reject


Accept


Rank


6th


5th


1st


8th


7th


3rd


4th


2nd


D. Profitability Index (PI)


Projects


Project 1


Project 2


Project 3


Project 4


Project 5


Project 6


Project 7


Project 8


PI


1.037


0.957


1.197


1.092


1.065


1.000


1.083


1.0773


Rank


6th


8th


1st


2nd


5th


7th


3rd


4th


All the projects will be undertaken except for project 8 since it is mutually exclusive with project 7, and project 6 and 2 will not be undertaken since they have IRR that is less than the 10%, the discount rate. Project 1 also might not be taken since “certain officers of the company have recently asserted that the discount rate should be much higher.”


Rank


1st


2nd


Project


8


7


IRR


11.41%


15.26%


NPV


182.98


165.04


Since these two projects are mutually exclusive and have the IRR above 10%, Project 8 will be chosen because it has higher NPV.


Rank


1st


2nd


3rd


4th


5th


6th


7th


8th


Project


3


4


8


7


5


1


6


2


PI


1.197


1.092


1.083


1.0773


1.065


1.037


1.000


0.957


All the projects will be undertaken except for project 7 since it is mutually exclusive with project 8, and project 6 and 2 will not be undertaken since they have PI’s equal to 1 and 0.957, because they are not greater than 1.


Selected Projects as per the quantitative methods as follow:


Rank


1st


2nd


3rd


4th


Projects


Projects 3


Projects 4


Projects 8


Projects 5


• Comparing the quantitative methods, we noticed that project 3 scored 1st four times using simple inspections of cash flows, NPV, PP, and PI. Project 7 however, scored 1st only through using the IRR method. Looking on the last ranked projects, project 2 has scored last 4 times using simple inspections of cash flows, NPV, IRR, and PI.


• Net Present Value is considered the best approach since it:


i. Uses Cash Flows.


ii. Uses all the Cash Flows of the project.


iii. And discounts the Cash Flows properly.


And through using the NPV approach, Project 3 got the highest NPV, 393.92, and then comes 4, 8, 5 and 1.


Answer 3:


Selected Projects as per the quantitative methods as follow:


Rank


1st


2nd


3rd


4th


Projects


Projects 3


Projects 4


Projects 8


Projects 5


The above table showing that it is absolutely the rank will be differ from the ranking obtain by simple inception of the cash flow


Answer 4:


Project 1 Bonds


Project 2 Equipment Depreciation


Project 3 Land or real assets investments


Project 4 Diary factory that incur agricultural costs


Project 5 Car Loan


Project 6 Stock


Project 7 Trucks Depreciation


Project 8 Construction projects


0.10865030333732562 6.3088234267993482E-2 0.11326357684480115 0.12328333077501186 0.11121604343002223 0.10000000000000009 0.15257139008454979 0.1140642023834566


IRR

Homework is Completed By:

Writer Writer Name Amount Client Comments & Rating
Instant Homework Helper

ONLINE

Instant Homework Helper

$36

She helped me in last minute in a very reasonable price. She is a lifesaver, I got A+ grade in my homework, I will surely hire her again for my next assignments, Thumbs Up!

Order & Get This Solution Within 3 Hours in $25/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 3 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 6 Hours in $20/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 6 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 12 Hours in $15/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 12 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

6 writers have sent their proposals to do this homework:

University Coursework Help
Top Essay Tutor
Helping Hand
Smart Accountants
Custom Coursework Service
A Grade Exams
Writer Writer Name Offer Chat
University Coursework Help

ONLINE

University Coursework Help

Hi dear, I am ready to do your homework in a reasonable price.

$102 Chat With Writer
Top Essay Tutor

ONLINE

Top Essay Tutor

I have more than 12 years of experience in managing online classes, exams, and quizzes on different websites like; Connect, McGraw-Hill, and Blackboard. I always provide a guarantee to my clients for their grades.

$105 Chat With Writer
Helping Hand

ONLINE

Helping Hand

I am an Academic writer with 10 years of experience. As an Academic writer, my aim is to generate unique content without Plagiarism as per the client’s requirements.

$100 Chat With Writer
Smart Accountants

ONLINE

Smart Accountants

I feel, I am the best option for you to fulfill this project with 100% perfection. I am working in this industry since 2014 and I have served more than 1200 clients with a full amount of satisfaction.

$95 Chat With Writer
Custom Coursework Service

ONLINE

Custom Coursework Service

Hey, Hope you are doing great :) I have read your project description. I am a high qualified writer. I will surely assist you in writing paper in which i will be explaining and analyzing the formulation and implementation of the strategy of Nestle. I will cover all the points which you have mentioned in your project details. I have a clear idea of what you are looking for. The work will be done according to your expectations. I will provide you Turnitin report as well to check the similarity. I am familiar with APA, MLA, Harvard, Chicago and Turabian referencing styles. I have more than 5 years’ experience in technical and academic writing. Please message me to discuss further details. I will be glad to assist you out.

$95 Chat With Writer
A Grade Exams

ONLINE

A Grade Exams

Hi, I have read the instructions carefully and I clearly understand what is required of the project. I always make sure I proofread and edit papers well to ensure they are free of typos, plagiarism, and grammar mistakes. Hire me for a timely delivery of a quality content.

$95 Chat With Writer

Let our expert academic writers to help you in achieving a+ grades in your homework, assignment, quiz or exam.

Similar Homework Questions

Evidence of computer literacy in nursing - Informative speech on food allergies - Jodie eales dentist geelong - Sample proposal database management system - David plant driving school stafford - Qrb 501 week 2 quiz - Reasons why cellphones should be allowed in school - Texas has a unicameral legislature - 1 1 choke balun - Devices in persuasive writing - Movie recommendation system report - Cybersecurity Planning - Wind turbine sankey diagram - Entrepreneurial judo strategy aims at - ANTH question - Macbeth act 5 scene 5 lines 17 28 - Stormy weather the century - If you give a mouse a brownie sequencing - Https owl english purdue edu owl resource 606 01 - The other side is not dumb summary - 309 guys hill road strathfieldsaye - Developmentally Appropriate Practices - pOWERpOINT DUE IN 20 HOURS - Artificial neural network ppt - Sheikh ammar bin humaid al nuaimi net worth - IISP Final Project - Strengths and weaknesses of dsm 5 - Comic strip template doc - Banca monte dei paschi di siena annual report - Shepreth wildlife park jobs - Nursing - Https theconnection sirva com agent training eld eld - Attention getter for diabetes speech - America's test kitchen best fat separator - Sydney water bill check - The cost of capital ppt - Mansion house residential home - Give me liberty or give me death essay - Aptly named sleep aid crossword clue - Oban high school uniform - University of westminster grading scale - Writing Assignment 5 - Chateau du soleil byron bay weddings - Columbus custom carpentry a compensation case study solution - Sir joseph hotung net worth - Central bayside community health services parkdale - Blindwrite 6 license key - Discussion - Identity and Access Management - Cyber Security - Shel silverstein picture puzzle piece - Homework - Prepare closing entries for homer winslow co - Short Paper - Why would a good communicator combine ethics with responsibility - Microeconomics true or false questions - Capstone Assignment - 5 Pages - $35 - Human Resources & Project Management Expert Needed. APA Experts ONLY! - Ethica and Legal Aspects of Nursing Practice DQ 5 week 3 Jany hernandez - Ge healthcare in india an ultrasound strategy case - Leon delaney radio announcer - How do open feedwater heaters differ from closed feedwater heaters - Dramatic techniques used in romeo and juliet - Printing press as an agent of change - Within working memory, “helpers” like the visuospatial buffer and articulatory rehearsal loop - Studies in Arts and Humanities 4 PAGE PAPER!!!! - Christening poems from grandparents - 5 PAGES - APA EXPERT ONLY - Human Resources - No Extension - Text mining - 540 paper - Similarities between chris mccandless and everett ruess - 1 page response to two reading materials - Ecce romani chapter 49 translation - A(n) ____ is a predefined procedure that performs a specific task and then returns a value. - Shakespeare primary school glasgow - Effect of chemical germicides on bacterial growth - Forensic and Investment - Evaluate the responses of the motor carrier Industry following the attack of 9/11 - Lollipop commercial how many licks - Apec study centre rmit - Blue ocean strategy table of contents - GEOB102 - Here are the cash flows for two mutually exclusive projects - How to calculate outright quotes for bid and ask - En 15085 certification bodies in india - Three phase instantaneous power - Use of force - Edmentum biology answer key - Gantt chart for mobile app development - Did ned kellys mum sell him - Federation of galaxy explorers - Cairns storm surge map - How can policies and procedures facilitate good strategy execution - Common base amplifier circuit analysis - Romeo and juliet writing prompts - Difference between radio and television news - Reflection in Action - Organizational values presentation gcu - Simbio virtual labs flowers and trees answers - Enterprise Risk Management Paper - Back titration caco3 hcl naoh - Http www shldirect com en us practice tests