For each multiple choice question, choose the BEST answer Alpa Inc oniy has neso

Question

For each multiple choice question, choose the BEST answer Alpa Inc oniy has nesources to nun one capital project this year Consider the flowing data and choose which of the four projects should be approved 5300on 500 miion 19% Project X $150 million $100 million 14% 17 month Project Y $75 million $$5 million |8% 12 months Project Z $125 million $85 million 19% 10 months hich gejnct should he appeove Beae i puchang a piece of aquigment for $300 000 There are delivery costs of $20,000 aion cots of 53000 and the use of the oquipment wil require employee training costs of 551000 'as wel as an menny ofpec al lutrams coting $25,000, Their tax rate is 40% and the machine will bhe dcnd ingightline derociation over 10 years What is the initial c375000

Explanation / Answer

Answer 1) Given the information mentioed above,

I would choose Project W because it has the highest NPV AND IRR. Out of all capital budgeting process NPV and IRR give the most reliable results.

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