Capital Budgeting Case Study
capital. However, most firms operate with finite capital expenditure budgets and must select the best from all acceptable projects, taking into account the amount of new financing required to fund these projects.
Chapter 10 problems
Problem 4 a. Project X CF0 = -30,000 C01 = 10,000 F01=5 NPV I =15 NPV = $3,521.55 Project Y CF0 = -40,000 C01=15,000 F01=5 NPV I=15 NPV = $10,282.33
Breakeven: NPV = 0, So PV net inflows = initial cost, i.e. what annuity for stated period has a PV…