advise the company on which project it should prefer, taking as your investment criterion the following alternative measures :
(i) What is each projects NPV?
(ii) What is each project IRR?
(iii) what is each projects payback period?
(iv)which projects should be accepted?why?
(v) what are the non financial factor to be considered while evaluating investment projects?\
(b) comparing with NPV explain the major pitfalls of IRR technique of capital budgeting, particularly on why IRR may not be consistent to the shareholders wealth maximization when compared to NPV
(i) the board of directors of crown limited is currently considering two mutually investment projects. both projects are concerned with the purchase of new plant. the following data is avilable for each projects
project A project B
cost 100,000 60000
expected annual net profit or loss
year 1 29000 18000
year 2 (1000) (2000)
estimated residual value
assume the company’s cost of capital is 10% and the company adopts the straight line method of depreciation
Miller Enterprises deposits the cash received during each day at the end of the day. Miller deposited $48,403 on October 3 and $50,203 on October 4. Cash register records and other documents supporting the deposits are summarized as follows:
10/310/4Cash sales$36,790$40,390Collections on account10,8859,828Total receipts$47,675$50,218
Required:1.Calculate the amount of cash over or cash short for each day.2.Prepare the journal entry to record the receipt and deposit of cash on October 3.3.Prepare the journal entry to record the receipt and deposit of cash on October 4.