five positive NPV projects to choose from. However‚ there is not enough manufacturing space in your plant to select all of the projects. Use profitability index to choose among the projects‚ given that you only have 100‚000 square feet of unused space. Project NPV Square feet needed Project 1 100‚000 40‚000 Project 2 88‚000 30‚000 Project 3 80‚000 38‚000 Project 4 50‚000 24‚000 Project 5 12‚000 1‚000 Total 330‚000 133‚000 Solution Compute the PI for each project Project NPV Square feet needed
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in depth. The project proposals (CPRs) are owned and presented by the real estate managers. There is a lot of pre-work that goes into the project before it’s presented. Typically 12-24 months of work is done to collect various data such as NPV‚ IRR‚ demographics‚ brand awareness‚ and sensitivity analysis. The sales projections are provided by the Research and Planning group and all project metrics are summarized into a standardized
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Present Value (NPV) of the four options. Substantiation Due to the nature of the industry and the machinery required‚ it is imperative that we enter into a long term contract with our clients. In valuing these contracts we must factor in the initial investment outlays for machine set-up costs (including the purchasing of new land)‚ as well as all future cash flows of a given project. To do this we use a form of analysis known as Net Present Value (NPV). In calculating the NPV of each investment
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per acre)(acres) Sale preparation and administration = (Cost MBF) (MBF acre) (acres) It is assumed that there is no depreciation as a result of the harvest. This is an indicator that operating cash flow is equal to net income. The NPV of the thinning‚ the NPV of all future harvests‚ minus the present value of the conservation fund costs. Revenue $39‚800‚250 Tractor cost 7‚200‚000 Road 2‚700‚000 Sale preparation & admin 945‚000 Excavator piling 1‚200‚000 Broadcast burning 2‚287‚500 Site
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Introduction Southern Company is one of the largest generators of electricity in American‚ serving the Southeastern United States for more than 100 years with clean‚ safe‚ reliable and affordable electricity. Its four subsidiaries: Georgia Power‚ Alabama Power‚ Mississippi Power and Florida Power‚ provide retail electric service to 4.4 million customers. This holding company’s operations cover all phases of the electric utility business capacity‚ as well as fiber optics and wireless communications
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measures. This project should be considered an independent project that is accepted or rejected on its own merits. The project will be decided from a cost/benefit standpoint by looking at the project ’s projected discounted cash flows‚ the calculated NPV of the project‚ the IRR and PI. Finally‚ the project ’s other qualitative advantages and disadvantages must also be considered before the project is accepted or rejected. Question 1: What is the basic nature of the problem in this case? Answer:
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Financial Appraisal techniques Part 2: Forecasting Part 1-Financial Appraisal Techniques Task 1. NET PRESENT VALUE (NPV) Year PROJECT X £000 Project Y £ 000 Discount Factor X Y 0 -200 -200 -200 -200 1 35 218 0.909 31.815 198.162 2 80 10 0.826 66.08 8.26 3 90 10 0.751 67.59 7.51 4 75 4 0.683 51.225 2.732 5 20 3 0.621 12.42 1.863 229 219 1)NET PRESENT VALUE (NPV) X= 229-200=29 Y=219-200=19 PAYBACK PERIOD: Cumulative Cash Flow Year PROJECT X £000 Project Y £ 000 X Y
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University of Windsor Odette School of Business Master of Management 0478-612-01/02 Corporate Finance in a Global Perspective Assignment #1 Dr. Keith C.K. Cheung Due: Feb. 26‚ 2013 Student Name: ___________________________________________ (Print) Student ID Number: _____________________________________ INSTRUCTIONS 1. Assignment is collected in class. No late assignment can be accepted. 2. Detailed solution will be found on the CLEW at 5:00 pm on Feb
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following question about the NPV analysis: 1. What are the key assumptions of this analysis? Average salary per employee is equal to 100k and a number of participating employees which has 50 employees per each of the 4 waves. The consulting cost is that 15400 per month._ 2. The current NPV is negative. One way to save money would be to reduce consulting costs. Please set the average consulting cost per month in cell b33 to $5000. At what discount rate is the NPV for the project 0?_____0
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1) How much importance should be given to the energy cost situation? Michael Burton’s proposal to expand into new energy efficient products is justified by increasing interest in the public and private sectors to reduce energy costs. At the highest level of government‚ the Obama administration has tied the US economy’s energy policy with its future success and competitiveness with other global powers. In a speech on June 2009‚ President Obama specifically mentions the Energy Department’s plans to
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