FIN 486 Week 4 Individual Assignment Capital Budgeting Scenarios
b. Judging on the basis of your findings in part a, what action should Jenny recommend to management with regard to the proposed equipment expenditure? c. In general, how does this problem demonstrate the importance of considering real options when making capital budgeting decisions?
P12 – 19 Capital rationing: NPV approach A firm with a 13 % cost of capital must select the optimal group of projects from those shown in the following table, given its capital budget of $ 1 million. LG 6 a. Calculate the present value of cash inflows associated with each project. b. Select the optimal group of projects, keeping in mind that unused funds are costly.
============================================
FIN 486 Week 4 Individual Assignment Capital Budgeting Scenarios
For more course tutorials visit www. uophelp. com
FIN 486 Week 4 Individual Assignment Capital Budgeting Scenarios Choose a scenario from the Capital Budgeting Worksheet to review and analyze. Using net present value, determine the proposal’ s appropriateness and economic viability. Prepare a 500-word report explaining your calculations and conclusions. Answer the following in your report: