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Essay / Research Paper Abstract
A 14 page paper assessing the future value of various projects under consideration for the purpose of selecting the one that holds greatest promise of future return. The paper focuses on NPV and IRR as the primary measures, but also addresses profitability index, payback and MIRR as alternatives. A second section of the paper discusses qualities of the capital asset pricing model (CAPM) including limitations; the last section of the paper discusses the Ameritech-SBC Communications merger as a horizontal merger motivated by promise of greater profitability for the new entity that the merger created. Bibliography lists 9 sources.
Page Count:
14 pages (~225 words per page)
File: CC6_KSfinNPVoth.rtf
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Unformatted sample text from the term paper:
any projects we need to consider the way in which they are measured and assessed. If we consider large corporations there are many different aspects that need to be considered
when thy look at setting up a new project, be it a new product or a new facility. With companies such as McDonalds there are many opportunities, and although many
may be projects each can also be seen as having an opportunity cost. This means that one project may mean another cannot take place. As a result there is a
need to ensure that all projects undertaken are those that will realize the best returns. The purpose here is to assess the future
value of various projects under consideration for the purpose of selecting the one that holds greatest promise of future return. However the money to be earned in the future
is less than the money in hand today, and by using net present value we can compare different types of investment. Assessing Projects Future Value
This is a way of being able to company different types of investment by using a discount factor to bring there profit or return into todays figures (Elliott
et al, 1998). This is achieved by taking the present value of the cash inflows, and the present values of the outflows with a discount rate applied to them
and is based an a specific rate of return needed for each year the investment is to be made (Elliott et al, 1998).
The projects under consideration are summarized in the following table. Though the execution of actual calculations is beyond the scope of research assistance, the student writing on this topic
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