1. Payback Analysis
Two new wind-farm tower duties are proposed for a small agency that installs them in south western Pennsylvania. Mission A will worth $250,000 to complete and is anticipated to have an annual net cash circulation of $75,000. Mission B will worth $150,000 to complete and should generate annual net cash flows of $52,000. As a small agency, the proprietor and senior administration workforce are very concerned about their cash circulation.
Use the payback interval methodology and resolve which mission is more healthy from a cash circulation standpoint.
Current your work and embody any formulation used to calculate PP.
2. Web Present Price
A contemporary mission nominated for consideration at your group has a four-year cash circulation of $20,000; $25,000; $30,000; and $50,000. The value of the mission is $75,000.
a. If the required worth of return is 20%, conduct a lowered cash circulation calculation to seek out out the NPV.
b. What is the benefit-cost ratio for the mission?
c. What would the NPV of the above mission be if the inflation worth was anticipated to be 4% in each of the next four years?
Chances are you’ll be assessed on the correctness of your calculations (40 components) and on presenting your work and results in educated methodology (10 components)