Portland Gaming, Inc. uses payback to evaluate potential projects and has a required payback period of four years for all projects. Currently, Portland is evaluating two independent projects.  Project A has an expected payback period of 3.6 years and a net present value of $8,400.  Project B has an expected payback period of 4.2 years with a net present value of $26,800. Which projects should be accepted based on the payback decision rule?   Group of answer choices Project A only Project B only Both A and B Neither A nor B Answer cannot be determined based on the information given.

Q: Abeer is a financial manager of a company contemplating two projects and its initial investment for…

A: Payback period is the period (in number of years) in which the initial investment in a project will…

Q: NUBD must choose one of two mutually exclusive projects. Project A has an up-front cost (t = 0) of…

A:

Q: Choosing between two projects with acceptable payback periods Shell Camping Gear, Inc., is…

A: Given, Initial investment = $100,000 Maximum payback period set by John = 4

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A: The conceptual formula used:

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A: Step 1The profitability index (PI), is the ratio of a proposed project's payout to its investment,…

Q: Two design alternatives for a new ride called the Scream Machine, the first of which requires an…

A: The External Rate of Return (ERR) is calculated based upon rate of return on cash flows considering…

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A: Time Value of Money (TVM): It is based on a principle that the money in hand now has more value than…

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A: Net present value (NPV) shows the excess of present value of cash inflows over cash outflows.

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A: Conventional benefit-to-cost ratio (B-C) =Benefits-DisbenefitsCosts=B-DC Given Initial investment…

Q: A bridge design firm is performing an economic analysis of two mutually exclusive designs fora…

A: EUAC is a cost calculated to compare the projects having a different useful life. It is the average…

Q: The Time Clock Co. is trying to decide which one of two projects it should accept. Both projects…

A: PROJECT 1 PROJECT 2 Year  Cash flows Cash flows 1 61000 45000 2 61000 45000 3 61000 45000…

Q: Ocean Tide Industries is planning to introduce a new product with a projected life of eight years.…

A: ““Hi There, thanks for posting the question. Since you have posted a question with multiple…

Q: Lithium, Inc. is considering two mutually exclusive projects, A and B. Project A costs $95,000 and…

A: A discount rate at which the net present worth of an investment is equal to zero is term as an…

Q: 1. Compute the initial cash flow for the project 2. Compute the earnings before taxes for years 1…

A: Initial Cash Flow: It is the initial cash outflow of the project, which is generally a cost of…

Q: Ocean Tide Industries is planning to introduce a new product with a projected life of eight years.…

A: Earnings after tax is also called as net income. Earnings after tax is the profit available in the…

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A: Benefit to cost ratio means where present value of cash inflow is divided with present value of cash…

Q: The National Park Service is considering two plans for rejuvenating the forest and landscape of a…

A: The current worth method will take into usage of the Present value factors and the concept of Time…

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A: Calculation of Initial Cash Flow for the Project is as follows: Initial Cash Flow = Cost of…

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A: Payback period It is helpful in calculating the time that will be needed for recovering the initial…

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A: For system B, Purchase price (P) = $11000 Annual cashflow (A) = $6000 n = 3 years r = 11%

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A: Opportunity Costs: The benefit that could be gained from an alternate use of an asset is known as…

Q: Your company is considering the development of a new product. In evaluating the proposed project,…

A: Note: This question has four subparts. The first three have been answered below:

Q: Radiology Associates is considering an investment, which will cost $259,000. The investment produces…

A:

Q: payback period for this project?

A: Payback period is the number of years required to fully recover the initial investment.

Q: Choosing between two projects with acceptable payback periods Shell Camping Gear, Ic., is…

A: Payback period is years in which we recover our initial investment

Q: Samuelson Electronics has a required payback period of three years for all of its projects.…

A:

Q: The ATS corp. has recently evaluated a proposal to invest in cost-reducing production technology.…

A: Solution: Initial investment = 18,000 NPV at 10% discount rate = 1,788 Period = 5 years PV of cash…

Q: Samuelson Electronics has a required payback period of three years for all of its projects.…

A: The independency for projects in financial management implies that the approval given for one…

Q: The management of Penfold Corporation is considering the purchase of a machine that would cost…

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Q: Mayberry, Inc., is considering a design change that will cost $6,000 and will result in an annual…

A: The AW method is commonly used for comparing alternatives. AW means that all incomes and…

Q: Falk Corporation is considering two types of manufacturing systems to produce its shaft couplings…

A: IRR(Internal ROR) is rate at which NPV(Net Present Value) of any proposal is zero. At IRR, Present…

Q: An electronic circuit board manufacturer is considering six mutually exclusive cost-reduction…

A: From the incremental investment data given in the question:

Q: NUBD must choose one of two mutually exclusive projects. Project A has an up-front cost (t 0) of…

A:

Q: Colorado Cleaning has a 5-year maximum acceptable payback period. The firm is considering the…

A: payback period is the period during which the firm recovers its initial investment. formula: payback…

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A: Payback period is one of the capital budgeting traditional techniques which is used to analyze the…

Q: year one and $75,000 in year two. Project B costs $120,000 and is expected to generate $64,000 in…

A: Given information for Project A :

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A: Formula: EAA = [NPV * r] / [1 - (1 + r)-n] Where, EAA = Equivalent Annual Annuity  NPV ( Net present…

Q: Calculate the annual effective interest rate using ERR method i

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Q: A Garry Manufacturing Company is considering a three-year project that has a cost of $75,000. The…

A: Hi, since you have posted multiple questions, I will answer the first one. Request you to please…

Q: Almendarez Corporation is considering the purchase of a machine that would cost $190,000 and would…

A: Net present  value  = Present value of cash inflows  - initial investment

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A: NPV is the difference between the present value of cash inflows and present value of cash outflows…

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A: Capital budgeting is a process used for making investment decisions by evaluating various projects…

Q: A firm has only $10,000 to invest and must choose between two projects. Project A returns $12,400…

A: In this question, we have to calculate the rate of return in each alternative to choose one…

Risk Management Techniques

Risk management is the procedure of recognizing, analyzing, monitoring, and preventing the risks and threatening factors of investments and business. Risks can arise from various factors including internal controls, market changes, natural disasters, and failure in productions. Risk management techniques enable entities to control and minimize the risks as well as the threatening factors of the business and it also helps to improve the business.