1. Business
  2. Finance
  3. hanmi group a consumer electronics conglomerate is reviewing its annual...

Question: hanmi group a consumer electronics conglomerate is reviewing its annual...

Question details

Hanmi Group, a consumer electronics conglomerate, is reviewing its annual budget in wireless technology. It is considering investments in three different technologies to develop wireless communication devices. Consider the following cash flows of the three independent projects available to the company. Assume the discount rate for all projects is 11 percent. Further, the company has only $24 million to invest in new projects this year.

  

Cash Flows (in $ millions)
Year CDMA   G4 Wi-Fi
0 –$ 8 –$ 16 –$ 24
1 13 13 21
2 10.5 27 37
3 5.5 24 24

   

a.

Calculate the profitability index for each investment. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

  

Profitability index
  CDMA
  G4
  Wi-Fi

    

b.

Calculate the NPV for each investment. (Enter your answers in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

    

NPV
  CDMA $
  G4 $
  Wi-Fi $
Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution