Finance Based on the cash flow shown over 10 years for three projects, which should be selected using the concept of IRR and Delta IRR? MARR 14% Year Project P Project Q Project R 0 $ (29,200.00) $(44,400.00) $(67,800.00) 1 $ 6,200.00 $ 8,825.00 $ 13,825.00 2 $ 8,200.00 $ 10,825.00 $ 16,825.00 3 $ … Read more
IRR 1. What is the IRR for a machine with the following details? APR (Nom / y) 9% p y c d Initial cost ($475,000) Salvage value 20% of purchase value First year cost ($106,000) Inflation (all costs) 6.50% p y First year revenue $195,000 Increase in revenue 11% p y Life of machine 5 … Read more
Course work Which method is the best evaluation of a capital expenditure: Payback Period or IRR? Many money managers often prefer to smooth dividends providing investors with a predictable return versus releasing the actual amount of excess cashflow. Does this increase or decrease the IRR of the equity investment? What other factors may be considered … Read more
Positive NPV Financial managers may rationalize that it is in their immediate interest to invest in short-term projects because they bring the most shareholder benefits; this is, in other words, the so-called agency problem. However, what could be the long-term consequences of that strategy? Watch the short agency problem video (7:14) below for an explanation … Read more
