Investment Appraisal Techniques
Not what you're looking for?
In the file attached is the Cash Flow Projection of two proposed projects. Both of these projects involve additions to DMart's highly successful product line and as a result, the required rate of return on both projects has been established at 12 percent.
Please help to:
(a) Briefly explain why the capital-budgeting process is so important to the company.
(b) Calculate the Payback Period & the Net Present Value (NPV) for each of these projects.
(c) State the advantages and disadvantages of using each of the above two methods of project appraisal.
(d) Based on the answers in (b) above, which projects would you recommend to the company, explain giving reasons for your answer.
Purchase this Solution
Solution Summary
The following posting helps with a problem involving investment appraisal techniques.
Solution Preview
(a) Briefly explain why the capital-budgeting process is so important to the company.
Capital budgeting is a process that attempts to predict the future and without it a company could make mistakes that are detrimental to their bottom line. The capital budgeting process is important to a company when attempting to identify which opportunities are available at the time. Once these opportunities ...
Education
- BA, Ashford University
- MBA, Ashford University
- Post-Master's Certificate, Northcentral University
- PhD (IP), Northcentral University
Recent Feedback
- "thank you so much that was very helpful!"
- "Thank You. I have a good understanding of the topic. I will also read the information that was provided."
- "Great thanks"
- "Thank u again!!!!!!!!!!!!!!!!!!"
- "Thank u!!!!!!!!!!!!!!"
Purchase this Solution
Free BrainMass Quizzes
Income Streams
In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.
Learning Lean
This quiz will help you understand the basic concepts of Lean.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Basics of corporate finance
These questions will test you on your knowledge of finance.
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.