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?