Determining NPV and IRR for given projects

Related BrainMass Solutions

• Discuss NPV decision rule; calculate payback period, IRR, profitability index

  positive NPV projects.

• DEFINE AND EXPLAIN CAPITAL BUDGETING

  However, if NPV is negative, the project should probably be rejected because cash flows will be negative. The IRR method involves determining the discount rate that equates the NPV equal to $0.

• Which is better, NPV or IRR? Why?

  How the profit compares compared to cost of capital and other competing projects (need IRR percent for this) 2. The magnitude of the profits (need NPV for this).

• a)Assume that the projects are of average risk. What is Dilbert's optimal capital budget? Which projects should be undertaken? (b)What is the corporate cost of capital the firm should use for budgeting purposes? (c)Now suppose it was discovered that project A has been ruled out because of an environmental ruling. . How would this change your answers to questions (a) and (b)? Be specific.

  How would this change your answers to questions (a) and (b)? Be specific. If A is ruled out, we need to find the project with the highest IRR or NPV. Now B has the highest IRR, and its NPV is higher than the rest.

• Calculating NPV and IRR for the given projects

  411782 Calculate NPV and IRR values for the given projects.

• Capital Budgeting - Payback, NPV, PI, IRR

   For mutually exclusive projects that crossover (crossover rate the discount rate at which the NPV profiles of two projects cross and, thus, at which the project's NPVs are equal) NPV and IRR decisions may conflict depending on discount rate selected

• Identifying the crossover rate in the given case

  In the above case, NPV is 25 for both projects at 21.86%. Cross over point is 21.86% in the given case.

• Capital Budgeting Assignment

  Projects may have more than one IRR, which complicates determining the appropriate reinvestment rate assumption using IRR. The IRR and firm's required rate of return often differ.

• Calculating NPVs and IRRs of given projects

  NPV and IRR are two important capital budgeting parameters and help us in selecting suitable project/s. Solution to the given problem explains the methodology to find the NPVs and IRRs of given projects and then it selects the better project.

• Determining the Best Mutually Exclusive Project

  408830 Determining the Best Mutually Exclusive Project Given the cash flows for projects S and L, which are MUTUALLY EXCLUSIVE projects, compute the capital budgeting metrics and based on your computations then recommend the best project.