Capital Budgeting

Our papers are 100% unique and written following academic standards and provided requirements. Get perfect grades by consistently using our writing services. Place your order and get a quality paper today. Rely on us and be on schedule! With our help, you'll never have to worry about deadlines again. Take advantage of our current 20% discount by using the coupon code GET20


Order a Similar Paper Order a Different Paper

Galaxy Satellite Co. is
attempting to select the best group of independent projects competing
for the firm’s fixed capital budget of $10,000,000. Any unused portion
of this budget will earn less than its 20 percent cost of capital. A
summary of key data about the proposed projects follows.

Project

PV of Inflows

Initial Investment

IRR

A

$3,050,000

$3,000,000

21%

B

$9,320,000

$9,000,000

25%

C

$1,060,000

$1,000,000

24%

D

$7,350,000

$7,000,000

23%

  1. Use the NPV approach to select the best group of projects. (Note that just the PV of inflows is given, you must subtract the initial investment to find the NPV.)
  2. Use the IRR approach to select the best group of projects. (Note that the discount rate or the cost of capital is 20%.)
  3. Which projects should the firm implement based on your analysis of
    both techniques and given the capital rationing amount? Write an email
    to your boss, Andy Fast, the CFO, explaining your rationale proving the
    choices based on the considerations of shareholder value and the maximum
    investment budget. Keep in mind that you are less concerned with using
    the whole budget than with maximizing the total return to Galaxy
    satellite.
Writerbay.net

We offer the best essay writing services to students who value great quality at a fair price. Let us exceed your expectations if you need help with this or a different assignment. Get your paper completed by a writing expert today. Nice to meet you! Want 15% OFF your first order? Use Promo Code: FIRST15. Place your order in a few easy steps. It will take you less than 5 minutes. Click one of the buttons below.


Order a Similar Paper Order a Different Paper