What is the essential difference between the conventional and modified versions of the benefit–cost ratio? Is it possible for these two measures to provide conflicting recommendations regarding invest/do-not-invest decisions?
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What is the essential difference between the conventional and modified versions of the benefit–cost ratio? Is it possible for these two measures to provide conflicting recommendations regarding invest/do-not-invest decisions?
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- Which of the following is not an approach that can be used to perform a capital budgeting economic analysis? a. Box-Jenkins algorithm b. Excel® SOLVER c. Exhaustive enumeration d. Lorie-Savage formulation.Four proposals (A, B, C, and D) are available for investment. Proposals A and C cannot both be accepted; Proposal B is contingent upon the acceptance of either Proposal C or D; and Proposal A is contingent on D. a. List all possible combinations of proposals and clearly show which are feasible. b. Of the ten principles, which one(s) is(are) well illustrated by this problem? c. Of the systematic economic analysis technique’s 7 steps, which one(s) is(are) well illustrated by this problem?Show in excel A firm has a capital budget of $30,000 and is considering three possible independent projects. Project A has a present outlay of $12,000 and yields $4, 281 per annum for 5 years. Project B has a present outlay of $10,000 and yields $4,184 per annum for 5 years. Project C has a present outlay of $17,000 and yields $5,802 per annum for 10 years. Funds which are not allocated to one of the projects can be placed in a bank deposit where they will earn 15%. (a) Identify six combinations of project investments and a bank deposit which exhaust the budget. (b) Which of the above combinations should the firm choose: when the reinvestment rate is 15%? (ii) when the reinvestment rate is 20%?
- In which way(s) is Sen’s (1970) impossibility theorem of project choice superior or inferior to the conventional Cost-Benefit Analysis principles of project choice based on the Hicks-Kaldor compensation test. Following the discovery and production of oil in commercial quantities in Ghana, the government of Ghana in collaboration with other stakeholders in the oil industry endeavors to establish a fertilizer production plant in Takoradi to take advantage of the by-product from crude oil production. As a potential Cost Benefit Analyst, list all the possible benefits and costs associated with the fertilizer plant project; direct, indirect, tangible and intangible, pecuniary and non-pecuniary.Clearly identify and discuss three (3) internal and three (3) external drivers, which Peter needs to consider as part of his strategic planning exercise relative to the case presented. Information from the scenario must be included to support the discussion. A image of the senario is attached as well as a image of the various types of internal and external drivers.Provide a dissemination process to ensure stakeholders are informed and committed to the plan.? (This should also include a clear outline of the dissemination process that will be used to ensure that stakeholders are informed of the plan and how commitment will be generated)
- Let PW(A) be the present worth of investment alternative A, PW(B) be the present worth of investment alternative B, B/C(A) be the benefit-cost ratio for investment alternative A, and B/C(B) be the benefitcost ratio for investment alternative B. If PW(A) > PW(B) > $0, which of the following answers is correct? a) B/C(A) > B/C(B); b) B/C(A) > B/C(B) > 1.0; c) B/C(A) > 1.0 and B/C(B) > 1.0; d) insufficient information available to answerThe potential percent gain or loss in changes of variable is taken into account by: a. sensitive analysis b. cost-benefit analysis c. present worth analysis d. break-even analysiswhat are some of the challenges in the adoption and usage of EVA analysis in different industry settings?