If the two projects are independent of each other, which projects, if any, should be selected?

Individual Course Project 4-5 pages

The Allied Group is considering two investments. The first investment involves a packaging machine, which can be used to package garments for shipping orders to customers. The second possible investment would be a molding machine that would be used to mold the mannequin parts.

The first possible investment is the packaging machine, which will cost $14,000. The second investment, the molding machine, would cost $12,000. The expected cash flows for the two projects are given below and the cost of capital to the firm is 15%. Both machines will be unusable after five years and have no salvage value.

The net cash flows for the two possible projects are given in the following table:

Year            Packaging Machine           Molding Machine 

0                          ($14000)                            ($12,000)

1                             4100                                     3200

2                             3300                                     2800

3                             2900                                     2800

4                             2200                                     2200

5                             1200                                     2200

Questions: Address all of the following questions in a brief but thorough manner.

  • Calculate each project’s payback period.
  • Calculate the NPV for each project.
  • Calculate the IRR for each project.
  • If the two projects are independent of each other, which projects, if any, should be selected? Explain why or why not.
  • If the two projects are mutually exclusive, which project, if any, should be selected? Explain why.

Are you looking for a similar paper or any other quality academic essay? Then look no further. Our research paper writing service is what you require. Our team of experienced writers is on standby to deliver to you an original paper as per your specified instructions with zero plagiarism guaranteed. This is the perfect way you can prepare your own unique academic paper and score the grades you deserve.

Use the order calculator below and get started! Contact our live support team for any assistance or inquiry.

Type of paper Academic level Subject area
Number of pages Paper urgency Cost per page:
 Total: