Exide batteries Inc is planning to expand its current production facility and is reviewing following project. YearCash-flow0-500,0001200,000250,000335,0004280,000 WACC for the Project is 8%. You as financial Analyst required to prepare a report on project Feasibility. RequirementsCalculate payback of the project also state advantages and disadvantages of this method.Calculate discounted payback of the project also state advantages and disadvantages of this method.Calculate NPV of the project. Should we take this project or not? Also state advantages and disadvantages of this method.Calculate IRR of the project also state advantages and disadvantages of this method.

Information Provided: WACC = 8% Cash outflow = -500,000 Cash Inflow (Year 1) = 200,000 Cash Inflow…

Answered: Calculate payback of the project also…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 15P

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Exide batteries Inc is planning to expand its current production facility and is reviewing following project.

Year	Cash-flow
0	-500,000
1	200,000
2	50,000
3	35,000
4	280,000

WACC for the Project is 8%.

You as financial Analyst required to prepare a report on project Feasibility.

Requirements

Calculate payback of the project also state advantages and disadvantages of this method.
Calculate discounted payback of the project also state advantages and disadvantages of this method.
Calculate NPV of the project. Should we take this project or not? Also state advantages and disadvantages of this method.
Calculate IRR of the project also state advantages and disadvantages of this method.

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