A firm is evaluating two investment proposals. The following data is provided for the two investment alternatives. Initial cash outflow IRR NPV(@14%) Project 1 $350m 28% $80m Project 2 $ 20m 36% $20m Refer to Exhibit 8-3. If the two projects are mutually exclusive, which project should the firm choose? What is the problem that the firm should be concerned with in making this decision? Group of answer choices project 1; project scale project 2; discount rate project 1; discount rate project 2; project scale
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
A firm is evaluating two investment proposals. The following data is provided for the two investment alternatives.
|
Initial
|
|
NPV(@14%)
|
|
| Project 1 |
$350m
|
28%
|
$80m
|
| Project 2 |
$ 20m
|
36%
|
$20m
|
Refer to Exhibit 8-3. If the two projects are mutually exclusive, which project should the firm choose? What is the problem that the firm should be concerned with in making this decision?
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