Financial Analysis
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Your company is considering three mutually exclusive projects. Project A will expand the existing business operations in the current location. Project B will expand the existing business operations to the adjacent county. Project C will expand into a new business operation that is not related to current business operations. Surprisingly, the projected financial cash flows and the analysis of these two projects yield exactly identical results:
Project A
Project B
Project C
NPV @ 15%
$12,100
$12,100
$12,100
IRR
25%
25%
25%
Payback
2.7 yrs
2.7 yrs
2.7 yrs
How should your company determine which project to select? Are there non-financial considerations that should be taken into account? Are there additional financial analyses that should be performed?
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This solution is comprised of a detailed explanation to answer how should your company determine which project to select, are there non-financial considerations that should be taken into account, and are there additional financial analysis that should be performed?
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Your company is considering three mutually exclusive projects. Project A will expand the existing business operations in the current location. Project B will expand the existing business operations to the adjacent county. Project C will expand into a new business operation that is not related to current business operations. Surprisingly, the ...
Purchase this Solution
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