BUSI 620 MENTOR It's Your Life/busi620mentor.com BUSI 620 MENTOR It's Your Life/busi620mentor.com | Page 46
$ 80,000 0.25 What is the expected value of five employees you hire ? Salvatore ' s Chapter 15 : a ) Discussion Questions : 7 . b ) Problems : 8 , 10 , and spreadsheet problem 1 . Discussion Question 7 :
a ) When can the NPV and the IRR methods of evaluating investment projects provide contradictory results ?
b ) How can this arise ? c ) Which method should then be used ? Why ?
Problem 8 : John Piderit , the general management of the Western Tool Company , is considering introducing some new tools to the company ’ s product line . The top management of the firm has identified three types of tools ( referred to as projects A , B , and C ). The various divisions of the firm have provided the data given in the following table on these three possible projects . The company has a limited capital budget of $ 2.4 million for the coming year .
a ) Which project ( s ) would the firm undertake if it used the NPV investment criterion ?
b ) Is this the correct decision ? Why ?
$ 80,000 0.25 What is the expected value of five employees you hire ? Salvatore ' s Chapter 15 : a ) Discussion Questions : 7 . b ) Problems : 8 , 10 , and spreadsheet problem 1 . Discussion Question 7 :
a ) When can the NPV and the IRR methods of evaluating investment projects provide contradictory results ?
b ) How can this arise ? c ) Which method should then be used ? Why ?
Problem 8 : John Piderit , the general management of the Western Tool Company , is considering introducing some new tools to the company ’ s product line . The top management of the firm has identified three types of tools ( referred to as projects A , B , and C ). The various divisions of the firm have provided the data given in the following table on these three possible projects . The company has a limited capital budget of $ 2.4 million for the coming year .
a ) Which project ( s ) would the firm undertake if it used the NPV investment criterion ?