Please aswer the questions

Arbaminch Univesity

School of graduate studies

Department of Management

Project Management

1. Explain feasibility analysis.

2. What is the NPV? . . . the B/C? . . . the IRR?

3. What is the criterion for project acceptability for the NPV? . . . for the B/C? . . . for the IRR?

4. How is the IRR of a project generally calculated?

5. Why is the IRR generally not a good way to evaluate investment alternatives?

6. Consider the following investment. You invest $500 per acre to establish a stand of trees. At the end of each year for 30 years, you incur an annual management expense of $10. At the end of 30 years, you receive $5,000 per acre in stumpage fees.

1. Calculate the NPV and B/C ratio for this investment.

2. Calculate the internal rate of return on this investment to the nearest tenth of a percent.

1. Given below are the after-tax incremental cash flows for Projects A and B. Note the similarity between the two projects.

1. Calculate the NPV at 20% for each project.

2. Calculate the IRR(s) for the two projects.

3. If you had to invest in one of the projects, which project would you prefer and why?

1. The Rover 6 is a new custom-designed sports car. An analysis of the task of building the Rover 6 reveals the following list of relevant activities, their immediate predecessors, and their duration.