David Ding is evaluating two conventional, independent capital budgeting projects (X and Y)

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The proper discount rate to use in calculating certainty equivalent net present ...
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SREEDEVI SUNILKUMAR
01-April-2014

by making use of the risk-adjusted discount rate (RADR) method of analysis.Projects X and Y have internal rates of return of16 percent and12 percent, respectively. The RADR appropriate to Project X is18 percent, while Project Y's RADR is only10 percent. The company's overall, weighted-average cost of capital is14 percent. David should:

accept Project X and accept Project Y.

accept Project X and reject Project Y.

reject Project X and accept Project Y.

reject Project X and reject Project Y.

Accounting Audit Management Project Management

Question ajoutée par Emad Mohammed said abdalla , ERP & IT Software, operation general manager . , AL DOHA Company
Date de publication: 2015/04/05

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Utilisateur supprimé

par Utilisateur supprimé

Agree with choice of the experts

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Emad Mohammed said abdalla

par Emad Mohammed said abdalla , ERP & IT Software, operation general manager . , AL DOHA Company

>>>>>>> reject Project X and accept Project Y.

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Mohammed Shahid Ullah

par Mohammed Shahid Ullah , Executive Director (Finance) , Coal Power Generation Company Bangladesh Limited

In case of Project X, Weighted cost of capital is less then the IRR, So, Company accept the Project X and reject Project Y.

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Wasi Rahman Sheikh

par Wasi Rahman Sheikh , WAREHOUSE SUPERVISOR , AL MUTLAQ FURNITURE MFG

My answer option3) ????????????????

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