Trident Fin301 module 4 discussion
Question # 00076255
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Updated on: 06/17/2015 06:41 AM Due on: 06/17/2015
How accurate do you think a company's estimates of the net present value of a proposed project are? What are the pressure points in the calculation where they might make a mistake? Refer to both the initial investment and to the components of the cash flow: revenues, operating expenses, depreciation, taxes, and the cost of capital to use for the computation of the present value.
Keep in mind that NPV is the value in today's dollars of cash flows to be received some time in the future minus what we have to pay today to get those cash flows.
Which of the following do you think would give you the most accurate NPV calculation (briefly comment on all three and then describe why you chose the one that you did):
A. Opening a branch of a starbucks in a new location
B. A car company considering building a factory to manufacture a car that runs on a new type of fuel
C. A husband and wife opening their first retail business
Keep in mind that NPV is the value in today's dollars of cash flows to be received some time in the future minus what we have to pay today to get those cash flows.
Which of the following do you think would give you the most accurate NPV calculation (briefly comment on all three and then describe why you chose the one that you did):
A. Opening a branch of a starbucks in a new location
B. A car company considering building a factory to manufacture a car that runs on a new type of fuel
C. A husband and wife opening their first retail business
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Rating:
/5
Solution: Trident Fin301 module 4 discussion