Hubbard, Inc

question 76

Essay

Hubbard, Inc. is considering Project A and Project B, which are two mutually exclusively projects with unequal lives. Project A is an eight-year project that has an initial outlay or cost of $18,000. Its future cash inflows for years 1 through 8 are the same at $3,800. Project B is a six-year project that has an initial outlay or cost of $16,000. Its future cash inflows for years 1 through 6 are the same at $3,600. Hubbard uses the equivalent annual annuity (EAA) method and has a discount rate of 11.50%. Which, if any, project will Hubbard accept?

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Definitions:

Performance Management

The heart and essence of leadership success; the process of performance planning, establishing direction and clarity of assignment; performance coaching, developing and encouraging others; and correcting poor performance, modifying and improving performance when mistakes are made.

Performance Planning

The process of setting objectives and expectations for employees, which serves as a foundation for measuring performance and guiding development activities.

Leadership

Social influence; showing the way or course of action; causing to follow by ideas and deeds; influencing through instruction, heroic feats, and force of will, magnified by the component of caring about the task to be done and the welfare of others; the functions or processes of establishing direction, aligning people and resources, and energizing people to accomplish results. See effective leadership.

Performance Ratings

The assessment and evaluation of an individual's or organization's work performance, often used for feedback, development, or rewards.