muhammad ali project b - Muhammad Ali Project B The above...

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Unformatted text preview: Muhammad Ali Project B The above are calculated in the excel file and the values are Payback Period 3.43 years Annual Rate of Return 21.96% Net Present Value 33039.37 Internal Rate of Return 17.99% 2. Would you recommend the acceptance of this proposal? Why or why not? Prepare a short double- spaced Word paper elaborating and supporting your answer. The proposal can be accepted. The reason is that the NPV is positive and the Internal Rate of return is greater than the cost of capital. A positive NPV implies that the project would result in an increase in shareholder wealth and the higher IRR implies that the project generates a return which is greater than the required return. It would be in benefit of the company to accept the proposal so it can generate profit and increase their equity, shareholder profit and revenue. 2. Would you recommend the acceptance of this proposal? Why or why not? Prepare a short double- spaced Word paper elaborating and supporting your answer. The proposal can be accepted. The reason is that the NPV is positive and the Internal Rate of return is greater than the cost of capital. A positive NPV implies that the project would result in an increase in shareholder wealth and the higher IRR implies that the project generates a return which is greater than the required return. It would be in benefit of the company to accept the proposal so it can generate profit and increase their equity, shareholder profit and revenue. 2. Would you recommend the acceptance of this proposal? Why or why not? Prepare a short double- spaced Word paper elaborating and supporting your answer. The proposal can be accepted. The reason is that the NPV is positive and the Internal Rate of return is greater than the cost of capital. A positive NPV implies that the project would result in an increase in shareholder wealth and the higher IRR implies that the project generates a return which is greater than the required return. It would be in benefit of the company to accept the proposal so it can generate profit and increase their equity, shareholder profit and revenue. 2. Would you recommend the acceptance of this proposal? Why or why not? Prepare a short double- spaced Word paper elaborating and supporting your answer. The proposal can be accepted. The reason is that the NPV is positive and the Internal Rate of return is greater than the cost of capital. A positive NPV implies that the project would result in an increase in shareholder wealth and the higher IRR implies that the project generates a return which is greater than the required return. It would be in benefit of the company to accept the proposal so it can generate profit and increase their equity, shareholder profit and revenue....
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This note was uploaded on 01/15/2012 for the course ECON 321 taught by Professor Sdas during the Spring '11 term at Keller Graduate School of Management.

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muhammad ali project b - Muhammad Ali Project B The above...

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