FRIDAY 08TH MARCH 2012 C38FN 2012-2013 CORPORATE FINANCIAL THEORY WORDCOUNT: 2874 Abstract This essay will discuss the net present value (NPV)‚ payback period (PBP) and internal rate of return (IRR) approaches for a project evaluation. It is often said that NPV is the best approach investment appraisal‚ which I why I will compare the strengths and weaknesses of NPV as well as the two others to se if the statement is actually true. Introduction To start of‚ the essay will attempt to explain the theoretical
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Expenses (HK) 10 List of Tables Table 1: List of Assumptions made for NPV analysis 4 Table 2: List of Limitations on NPV Analysis. 4 Table 3: Estimation of Resale value of Carrier @15th year 7 1. Introduction 1.1 Executive Summary Ocean Carriers Inc. (OCI) is an International provider of Marine transportation services mainly focussing on Dry Bulk commodities mainly iron ore and coal. OCI has offices located in New York and Hongkong. One of OCI’s customer’s is keen in committing for a
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Running head: A COMPARISON OF EVA AND NPV A Comparison of EVA and NPV (discuss the differences and similarity of EVA and NPV; why would companies choose to adopt EVA‚ implementation issues; chronicle the implementation experience of EVA on a real life company). 1 A COMPARISON OF EVA AND NPV 2 A Comparison of EVA and NPV (discuss the differences and similarity of EVA and NPV; why would companies choose to adopt EVA‚ implementation issues; chronicle the implementation
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MIRR VS. IRR Charles Beale Ashford University Business 650 Managerial Finance Professor Rick Kwan September 17‚ 2012 The Modified Internal Rate of Return is an underused measure for selection of projects that a company can choose because it is more effective at dealing effectively with periodic free cash flows that develop from the time that an asset is purchased through its life to the point where it is sold‚ ranking projects and variable rates of return through
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N04 HL P1 Q5 Payback Calculation Year Machine A $ Machine B $ 1 45‚000 25‚000 Part of 2 20‚000 (0.57 of 35‚000) 35‚000 Part of 3 - 25‚000 (0.45 of 55‚000) Investment 65‚000 85‚000 1 + 0.57 = 1.57 (Machine A has payback period of 1.57 years) 2 + 0.45 = 2.45 (Machine B has payback period of 2.45 years) Accounting Rate of Return Calculation Machine A $ Machine B $ Net Return 155‚000 205‚000 Total Return-Investment 155‚000 – 65‚000 = 90‚000 205‚000 – 85‚000 = 120‚000
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add five new chairlifts. Suppose that one lift costs $2 million‚ and preparing the slope and installing the lift costs another $1.3 million. The lift will allow 300 additional skiers on the slopes‚ but there are only 40 days a year when the extra capacity will be needed. (Assume that Deer park will sell all 300 lift tickets on those 40 days.) Running the new lift will cost $500 a day for the entire 200 days the lodge is open. Assume that the lift tickets at Deer Valley cost $55 a day. The new lift has
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Dolls A doll is a model of a human being‚ often used as a toy for children. Dolls have traditionally been used in magic and religious rituals throughout the world‚ and traditional dolls made of materials like clay and wood are found in the Americas‚ Asia‚ Africa and Europe. The earliest documented dolls go back to the ancient civilizations of Egypt‚ Greece and Rome. Dolls being used as toys was documented in Greece around 100AD. They have been made as crude‚ rudimentay playthings as well as elaborate art
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**What is NPV?** a) If the value of NPV is greater than 0‚ then the project is a go! In other words‚ it’s profitable and worth the risk. b) If the value of NPV is less than 0‚ then the project isn’t worth the risk and is a no-go. So NPV takes risk and reward into consideration‚ which is why we use it in the world of corporate finance and capital budgeting. **Example** In order for us to calculate NPV‚ let’s use the following example. Suppose we’d like to make 10% profit on a 3
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[February 3 2011] Analysis of the future | Fast-Food industry The fast food industry in Canada is like no other in the world. Canada has long been a country of indulging and not caring about consequences. Stats Canada published that in 2004‚ 23.1% of the Canadian population was overweight. It has also been noted that the obesity rate seen a sharp increase during 1978 to 1980. The fast food industry did begin in the early part of the 1950’s‚ but didn’t truly take off till the 1980’s. In
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Heritage Assessment in Evaluating the Needs of the Whole Person. The heritage assessment tool is useful in providing a view or the whole person. Understanding how different people deal with medical issues‚ get medical care‚ and tools they use in different cultures. Culture plays an important role in how medical procedures are done in different countries. Using an assessment tool enables you to get a more complete picture of the individual. The practice of using a variety of questions to more
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