# A large retail company wants to determine which investment project

A large retail company wants to determine which investment project it should invest in. Since you are the vice president of the company, you have been asked to analyze these two projects and report back to the board of directors regarding which of these two projects the company should undertake. Project A has an initial investment cost of \$42,000. This project is expected to produce \$9,450 in net cash flows each year for 7 years. Project B has an initial investment cost of \$36,750 with an expected net cash flow of \$7,875 per year for 5 years. Both investments have a 10% cost of capital.

• What is each project’s NPV?
• What is each project’s IRR?
• What is the payback period for each project?
• Which investment project do you recommend for your company? Be sure to explain why you arrived at the decision that you did.

https://saylordotorg.github.io/text_managerial-accounting/s12-02-net-present-value.html

***** Key Point of Lesson 1

• Net present value (NPV) is considered the ideal capital budget decision-making tool managers can use for making an investment decision on a project because it takes into consideration the time value of money and the maximizing of intrinsic value. This lesson also covers how to calculate NPV.*****

https://saylordotorg.github.io/text_managerial-accounting/s12-03-the-internal-rate-of-return.html

***** Key Point of Lesson 2

• The IRR is yet another common tool used by managers to assess an investment. The IRR is basically the rate of return that makes the NPV of all cash flows from a project equal zero. This lesson defines and explains IRR and how to calculate it.*****

https://saylordotorg.github.io/text_managerial-accounting/s12-05-the-payback-method.html

Key Point of Lesson 3

• One of the simplest investment decision-making tools used by management to determine whether or not to invest in an investment project is the payback period. It allows you to use the time period needed to recover the cost of a project when making a capital budgeting decision. This module explains the payback period and how to calculate it.

Pages (275 words)
Standard price: \$0.00

### Latest Reviews

Impressed with the sample above? Wait there is more

Related Questions

### Correlate your job responsibilities with the course outcomes listed below.

Correlate your job responsibilities with the course outcomes listed below. 300 Words. APA format Job Responsibilities • As an Oracle ERP Test Lead was responsible

### In your opinion, why is the study of women in

In your opinion, why is the study of women in the criminal justice system (in law enforcement and as offenders/victims) so important to the discussion

### Clinical Case: Mrs. G. is a 45-year-old female arrives at

Clinical Case: Mrs. G. is a 45-year-old female arrives at the emergency department where you are working with complaints of burning pain in her

### Week 2 Discussion For this assignment, you will review the

Week 2 Discussion For this assignment, you will review the latest evidence-based guidelines in the links provided below. Please make sure you are using scholarly

### After studying the assigned reading 21st Century Communication: A Reference

After studying the assigned reading 21st Century Communication: A Reference Handbook, Chapter 65: “The Changing Nature of ‘News’” and considering the concepts of timeliness, proximity,

### The idea of terrisom with muslims.Why do actions of fews affect one

Topic that is in the news, however, a) it must not be editorial unless substantiated by facts and b) it must be related to Homeland

### APA7 format for this paper. Keep your submissions concise, focused, and

APA7 format for this paper.  Keep your submissions concise, focused, and succinct.  Page length: 3-4, including Title Page and Reference Page. Question #1 Read

### Using PowerPoint or Google Slides, you are to create a

Using PowerPoint or Google Slides, you are to create a presentation appropriate for use with other educators or parents.  In this presentation you are

### Write a 3–5-page compensation and benefits package for a new

Write a 3–5-page compensation and benefits package for a new expatriate position working for either Java Corp. or an organization you are familiar with.

### Is project management more of a science or more of an art form?

Description “Is project management more of a science or more of an art form?” The following thoughts are suggested as things to think about, not

### PMBOK

Your company is ready to overhaul its project management practices. Top management is convinced that it will benefit from adopting PMI standards in organizing and

### This discussion forum focuses on analyzing Case Study 3.2 (Cultivating

This discussion forum focuses on analyzing Case Study 3.2 (Cultivating Character from Crooked Timber) from your textbook. In at least one paragraph, supported by evidence

New questions