Fin-100 week 10 homework | Business & Finance homework help

f you need help submitting assignments, please click here for more information.

There are three (3) types of textbook based homework items located at the end of each chapter. These include Discussion Questions (DQ), Exercises (E), and Problems (P). Some homework items have been custom created.

Complete the following homework scenario:

  • Required:
    Compare the results of the three (3) methods by quality of information for decision making. Using what you have learned about the three (3) methods, identify the best project by the criteria of long term increase in value. (You do not need to do further research.) Convey your understanding of the Time Value of Money principles used or not used in the three (3) methods. Review the video titled “NPV, IRR, MIRR for Mac and PC Excel” (located at https://www.youtube.com/watch?v=C7CryVgFbBc and previously listed in Week 4) to help you understand the foundational concepts: 

    Scenario Information:
    Assume that two gas stations are for sale with the following cash flows; CF1 is the Cash Flow in the first year, and CF2 is the Cash Flow in the second year. This is the time line and data used in calculating the Payback Period, Net Present Value, and Internal Rate of Return. The calculations are done for you. Your task is to select the best project and explain your decision. The methods are presented and the decision each indicates is given below.

    Investment Sales Price CF1 CF2
    Gas Station A $50,000 $0 $100,000
    Gas Station B $50,000 $50,000 $25,000

    Three (3) Capital Budgeting Methods are presented:

    1. Payback Period: Gas Station A is paid back in 2 years; CF1 in year 1, and CF2 in year 2. Gas Station B is paid back in one (1) year. According to the payback period, when given the choice between two mutually exclusive projects, the investment paid back in the shortest time is selected.
    2. Net Present Value: Consider the gas station example above under the NPV method, and a discount rate of 10%:
      NPVgas station A = $100,000/(1+.10)2 – $50,000 = $32,644
      NPVgas station B = $50,000/(1+.10) + $25,000/(1+.10)2 – $50,000 = $16,115
    3. Internal Rate of Return: Assuming 10% is the cost of funds; the IRR for Station A is 41.421%.; for Station B, 36.602.

    Summary of the Three (3) Methods:

    • Gas Station B should be selected, as the investment is returned in 1 period rather than 2 periods required for Gas Station A.
    • Under the NPV criteria, however, the decision favors gas station A, as it has the higher net present value. NPV is a measure of the value of the investment.
    • The IRR method favors Gas Station A. as it has a higher return, exceeding the cost of funds (10%) by the highest return.
Get 20% Discount on This Paper
Pages (550 words)
Approximate price: -

Try it now!

Get 20% Discount on This Paper

We'll send you the first draft for approval by at
Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

5 Star Essays strives for complete client satisfaction at all times. As a result, we never cut corners when it comes to the quality of our homework assistance.

Dissertation

Dissertation Help

At 5 Star Essays, Dissertations are some of the most complex papers that any student is required to write. They require understanding of the subject matter, analysis of existing information and interpretation to develop substantial arguments. Dissertation require significant expertise to ensure that the learner can attain the desired grades. Do these suggestions make you worry? 5staressays.org has all the answers you need. You do not have to struggle doing your dissertations. Hire our professional dissertational writers to get quality and original papers without plagiarism.

Admissions

Admission Essay Help

Have you been eyeing spots in prestigious institutions? Worry no more. We are here to ensure that your admission papers are written in a professional manner that ensures you get the first chances to your preferred institutions. Through our experts in admission essays, 5staressays.org can develop papers that are professional and guarantee you entry into the institutions.

Research

Research Paper Help

Research paper entail the use of qualitative and quantitative approaches to collect data, implementation of specific frameworks to interpret the data and use of analytical skills to address specific questions. This sounds difficult? 5staressays.org is there to ensure that you don’t strain in meeting these necessities of preparing your research. For answers to your research, get in touch with 5staressays.org.

Essays

Persuasive Essay Help

Do you have the right skills and expertise to argue a point persuasively? Writing persuasive essays requires the students to ensure that they argue points in a way that the reader buys into the ideas. This process requires special skills that are not common to all groups of learners. As such, 5staressays.org come in handy to bridge this gap and prepare the persuasive essay for you. The essays are quality, error free and original. Try us now for quality papers.

Application

Application Essay help

Application essays should guarantee you a spot in your preferred institutions. They should be able to be able to provide the reader with an understanding of the writer. How do you begin writing an application essay? What are the contents of the essay? Worry no more this are elements that are covered by 5staressays.org professionals in application essay writers. Get your application essay done for you and you will not regret it.

Scholarship

Scholarship Essay Writing Help

Are you eyeing a scholarship but you are not sure you are in a position to write your essay? 5staressays.org will help you to achieve the desired sponsorship by preparing your scholarship essay at an affordable price. We prepare essays that have a good structure, are plagiarism free and quality. Try us now for quality scholarship essays.

See all services