FIN – Inverness Medical Innovations (IMI) Management Problem

Inverness Medical Innovations (IMI) Management have a decision to make and they request your help. They are considering two mutually exclusive investments. The projects’ expected net cash flows are as follows:Expected Net Cash Flows Year Project A Project B0 $(45,000) $(50,000)1 (20,000) 15,0002 11,000 15,0003 20,000 15,0004 30,000 15,0005 45,000 15,000a. Construct NPV profiles for Projects A and B.b. Calculate each project’s IRR.c. If the required rate of return for each project is 13 percent, which project should Inverness Medical select? If the required rate of return is 9 percent, what would be the proper choice? If the required rate of return is 15 percent, what would be the proper choice?d. At what rate do the NPV profiles of the two projects cross?e. Project A has a large cash flow in Year 5 associated with ending the project. IMI’s management is confident of Project A’s cash flows in Years 0 to 4 but is uncertain about what its Year 5 cash flow will be. (There is no uncertainty about Project B’s cash flows.) Under a worst-case scenario, Project A’s Year 5 cash flow will be $40,000, whereas under a best-case scenario, the cash flow will be $50,000. Redo parts (a), (b), and (d) for each scenario, assuming a 13 percent required rate of return. If the required rate of return for each project is 13 percent, which project should be selected under each scenario?f. Write a management memo explaining all your recommendations about the questions above.

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more