1. Under certain conditions‚ a particular project may have more than one IRR. One condition under which this situation can occur is if‚ in addition to the initial investment at time = 0‚ a negative cash flow occurs at the end of the project’s life. a. True b. False 2. The modified IRR (MIRR) method has wide appeal to professors‚ but most business executives prefer the NPV method to either the regular or modified IRR. a. True b. False 3. A firm should never undertake an investment if
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About Whirlpool Corporation: 1989: Whirlpool entered European Markey by buying a 53% stake in the appliance division of Dutch based Philips Electronic for $ 470 million .Formed a joint venture firm named Whirlpool International BV (WIBV). 1990: Added the whirlpool brand name to the Philips product line. 1991: whirlpool bought the rest of the Philips stake (47%) for $ 600 million to become the sole owner of Whirlpool International BV. 1991-1999: WIBV developed three pan European brands
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1. Calculate the Payback Period of each project. Explain what argument Tim should make to show that the Payback Period is not appropriate in this case. Answer : Year Synthetic Resin Epoxy Resin Cash Flows Cumulative Cash Flows Cash Flows Cumulative Cash Flows 0 -$1‚000‚000 -$1‚000‚000 -$800‚000 -$800‚000 1 $350‚000 -$650‚000 $600‚000 -$200‚000 2 $400‚000 -$250‚000 $400‚000 $200‚000 3 $500‚000 $250‚000 $300‚000 $500‚000 4 $650‚000 $900‚000 $200‚000 $700‚000 5 $700‚000 $1‚600‚000 $200‚000
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significance of the simulation output and the assessment of the likelihood of project success (d) the measurement and interpretation of project value at risk Establish the potential economic return using IRR and modified IRR & advise on a projects return margin. Discuss merits of NPV & IRR. Discounted cash flow techniques are also extensively examined in the context of business valuations (business valuations are covered in chapters 9-12). Slow Fashions - 20 marks‚ June 09 Your
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Chapter 1: Introduction ------------------------------------------------- 1.1 Introduction Rice is the staple food for 65% of the population in India. It is the largest consumed calorie source among the food grains. With a per capita availability of 73.8 kg it meets 31% of the total calorie requirement of the population. India is the second largest producer of rice in the world next to China. The all India area‚ production‚ and yield of rice in the year 2001-02 was 44.62 million hectares‚ 93.08
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the Net Present Value (NPV) of each of the proposed project with Internal Rate of Return (IRR)‚ Profitability Index and Payback Period. If the project has a positive NPV‚ it would suggests the project is generating more cash than is required to service the debt and provide the appropriate returns; thus‚ the higher NPV‚ the better it is for the company. The project proposal with the positive and highest NPV‚ IRR and profitability index along with the shortest payback period would be acceptable for investment
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CASE REPORT OF FINANCIAL MANAGEMENT Diamond Chemicals PLC (B) Merseyside and Rotterdam Projects Table of content Key Issues 3 Analysis 3 Recommendations 8 Appendix 9 Appendix 1: Company Description 7 Appendix 2: Calculation on Merseyside Project Revision 7 Appendix 3: Calculation on Rotterdam Project without Right-of-way 7 KEY ISSUES The Diamond Chemical PLC as the producer of polypropylene has two production plants which are in Merseyside and Rotterdam. Both factories
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acceptable—for each of the following capital budgeting methods: a. Net present value (NPV) b. Internal rate of return (IRR) c. Modified internal rate of return (MIRR) d. Traditional payback (PB) e. Discounted payback (DPB) a. Should only be undertaken if NPV is greater than 0. b. Should only be undertaken if IRR is greater than the cost of capital. c. The MIRR will yield the same as the IRR method‚ so it would need to be greater than the cost of the capital. d. Should only be undertaken if PB is less than
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methods business owners use to efficiently analyze business investment. One of these effective methods is the calculation of the net present value or NPV. The second most effective method would be the calculations of the internal rate of return or IRR. There are also other useful methods as well‚ for example‚ the payback rule and the profitability index. Many business owners use the above procedures to help them in their decision making of acquiring other businesses. “NVP is important to a project
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exhibit 6.10‚ GSA’S result for the last three years shows the Net IRR increases over the years. Investing in California Emerging Venture fund I‚II‚III shows a profit in the Net IRR.For Instance‚ in 1999 the investment multiple is 79x more than the other two years‚ but the IRR has decreased over the years. Investing in CEV venture fund is the best decision to make because although the capital committed over the years decreased the Net IRR increased from 11.42 to 49.54.However‚ the funds to fund managers
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