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Genesis Energy Essay

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There are five metric dimensions that are crucial for evaluation and assessment for the most suitable project for Genesis Energy and those are NPV, IRR, discounted payback period, return on investment and dividend policy. These parameters will be used for this evaluation in order to find out the results. In the case of facility project option, we could see that net present value was negative. This negative number shows that the discounted cash flows of the project are lower than the initial investment. The second factor is IRR that is 15% in this case. This percentage is lower than the other investments options apart from equipment 3. The third factor is discounted payback period that was the highest one. It would take those five to six years …show more content…

It is important to give dividends to the stockholders because that is what is keeping them for being the owner of the stocks. The overall cost of the project is the highest compared with the other projects. The expected returns from the project The second project option is Equipment 1, where were we found positive and second highest net present value. Because of this number being positive and well ranked, this project should be accepted. Two other factors that are important are discounted payback period and return on investment which provides positive feedback for the project. From the return on the investment, we can see growth in a company year after year. The last factor of ROI says that total of 3.95 times of the returns will be generated from the projects which is lower as compared to the equipment 2. The third project option is Equipment 2, which has the highest net present value and internal rate on return, lowest payback period. Because of these good results, the growth in this project is very expected. Also, it will be very important to distribute dividends. This project will generate the higher ROI. From all the five characteristics, this project should be the one that is selected by Genesis

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