Assignment Example | Topics and Well Written Essays - 500 words - 115

Assignment Example The maximum values however shown that while North Utsire does not high wind speeds most of the time, there are a few instances where it experiences the highest wind speeds. Like is the case with other measures, Rockall experiences a marginally higher lower quartile as compared to North Utsire showing reduced prevalence of low speed winds for Rockall. It further exhibits a higher upper quartile showing high prevalence of high speed winds. This finding is reflected in the box and whisker plot whereby for the case of Rockall, the whisker plot shows closeness of the highest value and the upper quartile. However, for North Utsire, the plot shows a big difference between the upper quartile and the maximum value. The graph further shows that wind speeds in North Utsire are mainly concentrated at the lower speeds with spontaneous occurrence of high speed winds. The calculations and graphical presentations reveal that measures of central tendency are not in themselves, sufficient enough to draw conclusions with reference to a particular weather condition. While the means of the two stations fall closely, it is evident that the areas exhibit marginally different weather conditions. In essence, it highlights the importance of looking at all the measures before drawing conclusion about the weather of a particular

Financial Management Essay Example | Topics and Well Written Essays - 2000 words - 3

Financial Management - Essay Example With this rule, both projects qualify as good projects, although the pulley project has a higher value. The rule for the internal rate of return states that a given project should only be accepted if the project’s IRR is greater than or equal to the firm’s cost of capital. The firm’s cost of capital is 14%, in which case the truck project yields an IRR of 15%, it is to be accepted; the pulley project’s IRR is also higher than the firm’s cost of capital at 20%. The flaw with using IRR is that the rate of growth of cash flows is assumed to be the IRR’s. By using the modified IRR or MIRR, the rate of growth of cash flows or the so-called reinvestment rate is the cost of capital, or cost of funding the investment instead of the IRR. The rule for accepting a project based on MIRR is same as the IRR, that is, if MIRR is greater than or equal to the firm’s cost of capital, it should be accepted. Otherwise, it should be rejected as it will not contribute additional value to the firm. By using 14% as the finance rate and reinvestment rate, we get MIRR for the truck project as 14.5%--higher than the cost of capital, therefore it is to be accepted. With the pulley project, the MIRR is 17%, also higher than the cost of capital so the project should also be accepted. Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in its factory. Since both forklifts perform the same function, the firm will choose only one. (They are mutually exclusive investments.) The electric-powered truck will cost more, but it will be less expensive to operate; it will cost $22,000, whereas the gas powered truck will cost $17,500. The cost of capital that applies to both investments is 12%. The life for both types of truck is estimated to be 6 years, during which time the net cash flows for the electric-powered truck will be $6,290 per