Use proper business communication etiquette. Answer the following questions and make sure to number them. For NPV, BCR, IRR and EAB valuation techniques, indicate the assumptions, advantages, and disadvantages of using each valuation technique in determining capital project selection. In scenario 1, you created an NPV profile. Explain what it does and means. Be sure to explain what the crossover point indicates. In scenario 1, describe which alternative is best for NPV, BCR, IRR and EAB. In scenario 1, assuming the company is not under capital rationing which mutually exclusive alternative should be chosen… 1 or 2 AND why? In scenario 1, assuming the company is not under capital rationing which mutually exclusive alternative would you choose if the company plans to continue each project indefinitely rather than quit when the equipment wears out… 1 or 2, what valuation technique is most relevant AND why? In scenario 1, assuming the company is not under capital rationing which mutually exclusive alternative should be chosen if the company plans to terminate production when the equipment wears out… 1 or 2 AND why? For scenario 2, you are considering the mutually exclusive project you selected in scenario 1 along with two projects, alternative 3 and 4, that the company is also considering. Rank the projects based upon each valuation technique: NPV, BCR, IRR and EAB. i.e. rank best to work for NPV, then do the same for the other techniques. For scenario 2, you are considering the mutually exclusive project you selected in scenario 1 along with two projects, alternative 3 and 4, that the company is also considering. Now you must decide which projects to take on. If the company hasn’t set the budget for the year but they generally have capital rationing, how would you rank the projects according to how you would pick them and defend your decision. If instead of #7 having capital rationing there is NO capital rationing, between both scenarios, how would you rank the alternatives and why? If the company can only invest $250,000 which projects should they accept and why?
Mutually Exclusive and Independent Analysis.
