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Author Question: A firm is considering the following independent investments: ... (Read 20 times)

scienceeasy

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Question 1

Which of the following capital budgeting methods might not consider the salvage value of a machine being considered for purchase?
◦ Internal Rate of Return
◦ Net present value
◦ Payback
◦ Profitability Index

Question 2

A firm is considering the following independent investments:

ProjectInvestmentNPVPI
F$50M$1.00M1.02
G$80M$4.40M1.06
H$60M$4.00M1.07
I$70M($3.00M)0.96
J$40M$1.30M1.03
In the absence of capital rationing, what is the total NPV of the projects that should be selected? Which projects should be selected if the company only has $200M to invest?
◦ $7.70; F, G, H, J
◦ $7.70; G, H, J
◦ $10.70; F, G, H, J
◦ $10.70; G, H, J
◦ $13.70; F, G, H, J


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Marked as best answer by scienceeasy on Apr 25, 2021

Anonymous

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scienceeasy

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Reply 2 on: Apr 25, 2021
Great answer, keep it coming :)


alvinum

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

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