An investor is facing the task of choosing the most economically viable project between 4 different manufacturing companies (A, B, C and D). Below is the table of cash flows predicted for each of the companies. Cash flow is calculated for each year of production (Year 0 – 4). Negative values in the beginning indicate the capital that has to be invested in Year 0. Years 1-4 show positive cash returns, i.e., the income from sales.
Cash flow Yr 0 - 5 ( £ thousand) Company A Company B Company C Company D
A0 -100 -100 -100 -10
A1 20 50 60 4
A2 20 50 40 5
A3 40 50 50 5
A4 40 50 40 6
A commonly used method to compare viability between companies is to calculate a company’s Net Present Value (NPV), which determines its “time value of money” (e.g. what £1 will be worth in few years, hence helps account for inflation and risks).
The following formula can be used:
where A0 - An are cash flow in year 0, 1…n and i is the discount rate, i.e. the return that could be earned per unit of time on an investment with similar risk.
When choosing between different companies, the company with the highest NPV is more economically viable, and only projects with positive NPVs should be considered.
Write the program which helps choose the most economically viable company from the given 4 companies above and print the message explaining why this company is chosen. Your program should provide some form of user interactivity and means testing for scalability.
Two scenario should be explored: i of 10% and 5% ( the input by the user)
Please note that this is not a homework site. We won't do your homework for you. The purpose of homework is that you learn by doing. However we are always willing to help solve problems you encountered, correct mistakes you made in your code and answer your questions.
We didn't see your attempts to solve this problem yourself and so we cannot correct mistakes you didn't made and answer questions you didn't ask. To get help you should do something yourself and get real problems with something. If your problem is "I don't understand a thing", then you should go back to basics and study again.
An investor is facing the task of choosing the most economically viable project between 4 different manufacturing companies (A, B, C and D). Below is the table of cash flows predicted for each of the companies. Cash flow is calculated for each year of production (Year 0 – 4). Negative values in the beginning indicate the capital that has to be invested in Year 0. Years 1-4 show positive cash returns, i.e., the income from sales.
Cash flow Yr 0 - 5 ( £ thousand) Company A Company B Company C Company D
A0 -100 -100 -100 -10
A1 20 50 60 4
A2 20 50 40 5
A3 40 50 50 5
A4 40 50 40 6
A commonly used method to compare viability between companies is to calculate a company’s Net Present Value (NPV), which determines its “time value of money” (e.g. what £1 will be worth in few years, hence helps account for inflation and risks).
The following formula can be used:
where A0 - An are cash flow in year 0, 1…n and i is the discount rate, i.e. the return that could be earned per unit of time on an investment with similar risk.
When choosing between different companies, the company with the highest NPV is more economically viable, and only projects with positive NPVs should be considered.
Write the program which helps choose the most economically viable company from the given 4 companies above and print the message explaining why this company is chosen. Your program should provide some form of user interactivity and means testing for scalability.
Two scenario should be explored: i of 10% and 5% ( the input by the user)
I guess I can do the assignment for you, since today is my day-off. Just send me a forum reply and I will give you a response.
"A mechanical student". Is that an electric, nuclear or steam powered robot?
That aside, we don't do homework generally except for a substantial fee for service in which case you should transfer to the Jobs section.
Of course you are probably expecting a free solution. But keep in mind, if and when you ever graduate you will probably expect to be paid by your employer or client saying that you have special expertise you had to work hard at to become qualified. You will be more than likely be offended by clientele expecting a free ride at your expense while they so unceremoniously ignore the fact that you have a right to earn a living pay your bills and perhaps feed your family and set a good example to.