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Problem 4. Which project would you select on the basis of rate of return, assuming MARR =15%. Please use excel spreadsheet to answer.

Coffer Company is analyzing two potential investments. Cost of machine Project X $ 97,090 Net cash flow: Year 1 Year 2 Year 3 Year 4 Project Y $ 72,000 36,500 3,700 36,500 33,500 36,500 33,500 0 13,000 If the company is using the payback period method, and it requires a payback period of three years or less, which project(s) should be selected? Multiple Choice ○ Project Y. ○ Project X. Both X and Y are acceptable projects. Neither X nor Y is an acceptable project. Project Y because it has a lower Initial Investment.

4 You are considering the following investment activity.  The facts are the following:                   Required investment   300,000.00           Discount Rate 9%           Life of project               7.00 Years         Net income for the project             Sales   140,000.00           Expenses             Material     25,000.00           Labor     35,000.00           Overhead     15,000.00           Total Expenses     75,000.00           Net Income     65,000.00                         What is the NPV of this investment?           What is the IRR of this investment?           Would you fund this project?                         Show your work below                Year               0               1               2               3               4               5               6               7

AL Rawabi SAOG a diary company based in al buraimi has four independent projects available. Capital needed NPV at time 0 RO. RO. Project 1 10,000 30,000 Project 2 8,000 25,000 Project 3 12,000 30,000 Project 4 16,000 36,000 If the company has RO.32,000(Capital Budget) to invest at time 0, and each project is Indivisible, but none can be delayed, what is the maximum NPV that can be earned? Note: Use PI Method for Ranking the project a. OR.85,000 b. OR.89,500 c. OR.103,000 d. OR.102,250

Coffer Company is analyzing two potential investments. Project X Cost of machine Net cash flow: Year 1 Year 2 $ 85,470 Project Y $ 65,000 33,000 33,000 3,000 30,000 Year 3 Year 4 33,000 0 • 30,000 25,000 If the company is using the payback period méthod, and it requires a payback period of three years or less, which project(s) should be selected? Multiple Choice Project Y. Project X. Both X and Y are acceptable projects. Neither X nor Y is an acceptable project.

Do solve all 3 parts

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Revenues generated by a new fad product are forecast as follows:   Year Revenues 1 $50,000 2 40,000 3 20,000 4 10,000 Thereafter 0     Expenses are expected to be 50% of revenues, and working capital required in each year is expected to be 20% of revenues in the following year. The product requires an immediate investment of $40,000 in plant and equipment.   Required: a. What is the initial investment in the product? Remember working capital. b. If the plant and equipment are depreciated over 4 years to a salvage value of zero using straight-line depreciation, and the firm’s tax rate is 30%, what are the project cash flows in each year? Assume the plant  and equipment are worthless at the end of 4 years. c. If the opportunity cost of capital is 12%, what is the project's NPV? d. What is project IRR?

Revenues generated by a new fad product are forecast as follows: Year Revenues 1 $ 46,000 2 30,000 3 20,000 4 10,000 Thereafter 0 Expenses are expected to be 50% of revenues, and working capital required in each year is expected to be 30% of revenues in the following year. The product requires an immediate investment of $51,000 in plant and equipment. Required: What is the initial investment in the product? Remember working capital. If the plant and equipment are depreciated over 4 years to a salvage value of zero using straight-line depreciation, and the firm’s tax rate is 40%, what are the project cash flows in each year? If the opportunity cost of capital is 15%, what is project NPV? What is project IRR?

Q1: For the machines indicated below. Consider i= 10% per year First cost Annual cost Salvage value Life duration Machine A 20,000 $ 5,000 $ 7,500 $ 3 Machine B 25,000 4,000 6,000 4 A- Draw cash flow diagram for each machine for one cycle of each project B- Draw cash flow diagram for each project considering the LCM life cycle (Hint: different project duration, need to have the LCM life cycle) C- Compare the machines to select best alternative one based on Present worth analysis method D- Repeat part B considering Future worth analysis

Can you help me work out question 1(a) please without having to use excel? Thank you in adv

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