Please answer the below questions.
1. Compare and contrast, NPV, PI, and EVA. Which evaluation method would you prefer and why?
2. What is the project manager's goal in selecting projects for the firm? How does the capital budgeting process help in accomplishing those goals?

Please answer the problem below:

(Net Present value calculation) Big Steve's makers of swizzle stickers, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $90,000 and will generate net cash inflows of $16,000 per year for 8 years.

a. What is the project's NPV using the discount rate of 11%? Should the project be accepted? Why or why not?
b. What is the project's NPV using a discount rate of 16%? Should the project be accepted? Why or why not?
c. What is the project's internal rate of return? Should the project be accepted? Why or why not?

a. If the discount rate is 11 percent, then the project's NPV is $___ (round to the nearest dollar).

The project (should not be or should be) accepted because the NPV is (negative or positive) and therefore (adds or does not add) value to the firm.

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Please answer the below questions in 50 to 100 words.
1. Compare and contrast, NPV, PI, and EVA. Which evaluation method would you prefer and why?
The Net Present Value of an investment proposal is equal to the present value of its annual free cash flows less the investment's initial outlay. The NPV method recognizes the time value of money and is consistent with the firm's goal of maximizing shareholders' wealth. The NPV method suffers one disadvantage which is that it requires detailed long-term forecasts of a project's cash flows.
The Profitability index is the ratio of the present value of the future free cash flows to the initial outlay. The PI has the same advantages as the NPV in addition to the fact that the PI is a ratio while the NPV is a dollar figure, hence if a firm is interested in a comparative analysis of different investments, the PI would be more beneficial. Finally, the PI again like the NPV suffers one disadvantage which is that it ...

Solution Summary

Project NPV evaluation is examined. Project manager's goals in selecting projects for the firm are discussed.

You are evaluating two mutually exclusive capital budgeting projects that have the following characteristics:
CASH FLOWS
YEAR PROJECT A PROJECT B
0 ($4,000) ($4,000)
1 0

Better Mousetraps has developed a new trap. It can go into production for an initial investment in equipment of $6 million. The equipment will be depreciated straightline over 5 years to a value of zero, but in fact it can be sold after 5 years for $500,000. The ﬁrm believes that working capital at each date must be maint

Please help figuring this problem out. Please show all formulas.
Project c0 c1 c2 c3
A -$20,000 +$8,000 +$8,000 +$8,000
B _$20,000 0 0 +$25,000.
a. At what interest rates would you prefer project

I need help with the following questions based on the details given in the attached file:
1. Salt has requested that all quantifiable data, upon which he will base his choice of project, be compiled and presented to him. The data needed are shown in the following table.
Complete the missing entries for project C.
2. Com

A project that costs 3,000 will provide annual cash flows of $800 for each of the next 6 years. Is this project worth pursuing if the discount rate is 10%? How high can the discount rate be before you reject the project?

A project has annual cash flows of $7500 for the next 10 years and then $10,000 each year for the following 10 years. The IRR of this 20-years project is 10.98%. if the firm's WACC is 9%, what is the project's NPV?

Question 1
Assume you have just been promoted junior financial manager of a company. You are very smart and are planning to be promoted in the next 2-2.5 years. An associate of your company shows you a project with the following cash flows.
End of Year Cash Flows
0 -$100,000
1 $40,000
2 $40,000
3 $40,000
4 $40,000
5 -$

Profitability Index versus NPV. Consider these two projects:
Project C0 C1 C2 C3
A -$36 +$20 +$20 +$20
B - 50 + 25 + 25 + 25
a. Which project has the highest NPV if the discount rare is 10%?

The Hokie Corporation is considering two mutually exclusive projects. Both require an initial outlay of $10,000 and will operate for 5 years. Project A will produce expected cash flows of $5,000 per year for years 1 through 5, whereas project B will produce expected cash flows of $6,000 per year for years 1 through 5. Because pr

For a company which earns 10 Percent on its call account deposits,borrows longterm at 12 percent and its main investments are in the form of call account deposits,what will be the best DISCOUNT RATE to use in projectevaluationNPV,as an alternative to using WACC? How can such a rate be justified?