Cindy Scott Case Scenario- Capital Budgeting In the Cindy Scott Case ( Case study 3), Question 4 does not mention that the two projects are repetitive. No where in the case there is a mention of the projects being repetitive ...
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Please can you give clarity on the Terminal value calculation under Expansion and Replacement project As per the clasess, under Expansion we have the formula : Terminal value= Salvage value+ Recovery of WC – tax(salvage-book value) And under Replacement we have: Terminal ...
If nothing is mentioned about working capital investment related to recovered or liquidating, should we consider it got liquidated in the end and will be counted in the terminal value?
Can we improve the project’s NPV by using the after tax cost of debt as the discount rate given that the project s financed by 100% debt? why?
As per sir notes, when they don’t mention “repetitive”, we should go with high NPV, so 5yrs project. but here it says use EAA/LCM method. please explain
As initiating residual dividend policy, company don’t have enough +ve NPV projects. So it may not able to generate more earnings growth. in this view, can we say option A is correct?
As of my knowledge, when the project is 100% financed, then required return is same as after tax cost of debt, so option C is correct. But it says Option A. Please explain why?
Cindy Case study on capital Budgeting Hello sir The answer to this question is option c. In the solution the institute has solved using the EAA and LCM approach(both applicable). I am unable to understand how is EAA applicable when the ...