Hanmi Group, a consumer electronics conglomerate, is reviewing its annual budget in wireless technology. It is considering investments in three different technologies to develop wireless communication devices. Consider the following cash flows of the three independent projects available to the company. Assume the discount rate for all projects is 9 percent. Further, the company has only $26 million to invest in new projects this year. Cash Flows (in millions) Year CDMA G4 Wi-Fi 0-$10-$16 -$26 1 2 3 a. CDMA a. G4 a. b. b. G4 b. a. Calculate the profitability index for each investment. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. Calculate the NPV for each investment. (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89) Wi-Fi CDMA 13 9.5 7.5 Wi-Fi 14 24 29 38 26 26

Hanmi Group, a consumer electronics conglomerate, is reviewing its annual budget in wireless technology. It is considering investments in three different technologies to develop wireless communication devices. Consider the following cash flows of the three independent projects available to the company. Assume the discount rate for all projects is 9 percent. Further, the company has only $26 million to invest in new projects this year. Cash Flows (in millions) Year CDMA G4 Wi-Fi 0-$10-$16 -$26 1 2 3 a. CDMA a. G4 a. b. b. G4 b. a. Calculate the profitability index for each investment. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. Calculate the NPV for each investment. (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89) Wi-Fi CDMA 13 9.5 7.5 Wi-Fi 14 24 29 38 26 26

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 3P

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