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Gelneren [198K]
3 years ago
15

You are considering two mutually exclusive projects. Project A costs $3.6 million, has a required return of 14.5 percent, and an

IRR of 14.3 percent. Project B costs $4.1 million, has a required return of 16 percent, and an IRR of 15.6 percent. Which project(s) should be accepted
Business
1 answer:
sp2606 [1]3 years ago
3 0

Answer:

Neither

Explanation:

The internal rate of return is a capital budgeting method that is used to determine the profitability of a project.

Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested

The decision rule when using the internal rate of return is to undertake the project if the internal rate of return is greater than the required return of the project. If this is not met, the project should be rejected.

If choosing between multiple projects, the decision rule is to choose the projects with the highest internal rate of return. This is because that project would be the most profitable.

Neither of the project should be selected because the IRR of both projects is less than their required returns

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A great example of market saturation is Netflix. While new streaming services are in the introduction and growth stages, the market originator has reached its saturation point.

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Express Meals is a local bistro that has budgeted inventory purchases as follows: September: $ 300,000 October: $ 350,000 Novemb
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Answer:

Express Meals

The budgeted accounts payable balance on November 30 is:

= $347,000.

Explanation:

a) Data and Calculations:

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November: $ 390,000

Payment to suppliers:

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Month of purchase  (20%)             60,000        70,000         78,000  $208,000

Month following purchase (70%)                     210,000      245,000  $455,000

Two months after purchase (10%)                                         30,000  $30,000

Total payments                             60,000      280,000      353,000  $693,000

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Non Bank Institutions provide avenues for transforming an economy's savings to capital investment.

One way they do this is by underwriting new issues of securities for corporations, states, and municipalities needed to raise money in the capital markets.

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im pretty sure it's encouraged

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