Strategic decision makers are required to be able to evaluate projects based on

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Strategic decision makers are required to be able to evaluate projects based on the firm's long-term objectives as well as the project%u2019s ability to earn the company additional compensation. The 3 main tools used are the payback period, net present value, and internal rate of return. Needs to be 700-1000 words. Year Project 1 Project 2 Project 3 0 ($30,000) ($32,000) ($35,000) 1 $11,000 $15,000 $11,000 2 $11,000 $14,000 $11,000 3 $11,000 $11,000 $11,000 4 $11,000 $2,000 $11,000 5 $11,000 $500 $11,000 Project NPV rate 1 5% 2 5.5% 3 6% Answer the following questions using the data in the charts above: Calculate the net present value for each project using each project's NPV rate. Show your work. Calculate the payback period for each project. Show your work. Calculate the internal rate of return for each project. Show your work. Which project would the company select using the net present value method in project 1? Explain your answer. Which project would the company select using the net present value method in project 2? Explain your answer. Which project would the company select using the net present value method in project 3? Explain your answer. Which project would the company select using the payback period? Explain your answer. Which project would the company select using the internal rate of return method? Explain your answer.
Strategic decision makers are required to be able to evaluate projects based on the firm's long-term objectives as well as the project%u2019s ability to earn the company additional compensation. The 3 main tools used are the payback period, net present value, and internal rate of return. Needs to be 700-1000 words. Year Project 1 Project 2 Project 3 0 ($30,000) ($32,000) ($35,000) 1 $11,000 $15,000 $11,000 2 $11,000 $14,000 $11,000 3 $11,000 $11,000 $11,000 4 $11,000 $2,000 $11,000 5 $11,000 $500 $11,000 Project NPV rate 1 5% 2 5.5% 3 6% Answer the following questions using the data in the charts above: Calculate the net present value for each project using each project's NPV rate. Show your work. Calculate the payback period for each project. Show your work. Calculate the internal rate of return for each project. Show your work. Which project would the company select using the net present value method in project 1? Explain your answer. Which project would the company select using the net present value method in project 2? Explain your answer. Which project would the company select using the net present value method in project 3? Explain your answer. Which project would the company select using the payback period? Explain your answer. Which project would the company select using the internal rate of return method? Explain your answer.
Strategic decision makers are required to be able to evaluate projects based on the firm's long-term objectives as well as the project%u2019s ability to earn the company additional compensation. The 3 main tools used are the payback period, net present value, and internal rate of return. Needs to be 700-1000 words. Year Project 1 Project 2 Project 3 0 ($30,000) ($32,000) ($35,000) 1 $11,000 $15,000 $11,000 2 $11,000 $14,000 $11,000 3 $11,000 $11,000 $11,000 4 $11,000 $2,000 $11,000 5 $11,000 $500 $11,000 Project NPV rate 1 5% 2 5.5% 3 6% Answer the following questions using the data in the charts above: Calculate the net present value for each project using each project's NPV rate. Show your work. Calculate the payback period for each project. Show your work. Calculate the internal rate of return for each project. Show your work. Which project would the company select using the net present value method in project 1? Explain your answer. Which project would the company select using the net present value method in project 2? Explain your answer. Which project would the company select using the net present value method in project 3? Explain your answer. Which project would the company select using the payback period? Explain your answer. Which project would the company select using the internal rate of return method? Explain your answer.

Explanation / Answer

Year Project 1 PV @   15% PV @ 25% Project 2 PV @ 25.5% PV @ 18% Project 3 PV @ 36% 0 30000 Nil 32000 Nil Nil 35000 Nil 1 11000 9559 8800 15000 11955 12705 11000 8085 2 11000 8316 7040 14000 8890 10052 11000 5951 3 11000 7216 5632 11000 5555 6699 11000 4378 4 11000 6292 4510 2000 806 1032 11000 3212 5 11000 5467 3608 5000 1605 2185 11000 2365 36850 29590 28811 32673 23991 NPV 6850 -3189 -11009 PBP 2.72yrs 2.72yrs 3.18yrs IRR 24.43% 23.19% 18.37% NPV = PV of Cash Inflow - PV of Cash Outflow Pay Back Period = Cost/Cash Inflow IRR = LDR +( PV at LDR - PV of outflow )/PV at LDR-PV at HDR *(HDR- LDR) Calculation Of Pay Back Period Particulars Project 1 Project 2 Project 3 Cost 30000 32000 35000 Upto Yr 2 Cost recovered 22000 29000 22000 Futher Cost to be incurred 8000 3000 13000 PBP 2.72 2.72 3.18 Calculation Of IRR Particulars Project 1 Project 2 Project 3 PV at 15%,25.5% and 36% for project 1,2,3 36850 28811 23991 PV at 25%,18%,15%   for project 1,2,3 29590 32673 37103

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