CapitalBudgeting (1) (1)

Accounting provide a. And. b

NOTE: JUST ANSWER 3. Accounting rate of return4. Profitability index

What is the formula of IRR in capital Budgeting? In the pic attached how did you get the IRR here? How to arrive in its amount of irr?

Basic Capital Budgeting Techniques Answer each independent question, (a) through (e).a. Project A costs $5,000 and will generate annual after-tax net cash inflows of $1,800 for 5 years.What is the payback period (in years, rounded to 2 decimal places) for this investment under theassumption that the cash inflows occur evenly throughout the year?b. Project B costs $5,000 and will generate after-tax cash inflows of $500 in year 1, $1,200 in year2, $2,000 in year 3, $2,500 in year 4, and $2,000 in year 5. What is the payback period (in years,rounded to 2 decimal places) for this investment assuming that the cash inflows occur evenlythroughout the year?c. Project C costs $5,000 and will generate net cash inflows of $2,500 before taxes each year for 5years. The firm uses straight-line depreciation with no salvage value and is subject to a 25% taxrate. What is the payback period (in years, and rounded to 2 decimal places) under the assumptionthat all cash inflows occur evenly throughout the…

Question 4: Capital Budgeting a). Consider the following two mutually exclusive projects: YEAR 0 CASH FLOW (A) -$300,000 1 20,000 2 70,000 3 80,000 4 400,000 CASH FLOW (B) -$39,000 18,000 12,000 18,000 19,000 Whichever project you choose, if any, you require a 15 percent return on your investment. (i) If you apply the payback period (PBP) criterion, which investment will you choose? Why? (ii) If you apply the net present value (NPV) criterion, which investment will you choose? Why? (iii)If you apply the profitability index (PI) criterion, which investment will you choose? Why? (iv) If you apply the internal rate of return (IRR) criterion, which investment will you choose? Why? (v) Based on your answers in (i) through (iv), which project will you finally choose? Why? Examiner: Prof. Ebenezer Bugri Anarfo Page 9 b). You are trying to determine whether to expand your business by building a new manufacturing plant. The plant has an installation cost of $15 million, which will be…

can u make the npv, using this format                             1                                2                             3                            4                                5  Net income  5,175,140.21             5,448,761.67          5,709,496.33           7,789,606.88            6,251,091.31 PV 12%

solve a( i,ii,iii) please for the image provided.

can u compute the NPV and make a description of it

Discount Rate 12%         Investment Project Cash Flow Total Net Cash Flow Initial Investment  $           (8,000)  ?  Year 1  $                800 ? Year 2  $                900 ? Year 3  $            1,500 ? Year 4  $            1,800 ? Year 5  $            3,200         NPV of investment $ ? Estimated Payback Period ?       Estimate the total net cash flows, NPV of Investment and Estimated Payback Period using the excel's formula.

Task 2A business has two projects to invest in, as follows:Create a new spread sheet, calculate NPV for the following projects at discount rates of 3% and 7%, respectively, by creating a dynamic process. Project 1 Project 2Year    Cash inflows    Cash outflows     Cash inflows     Cash outflows0          0.00                70,000.00             0.00                  70,000.001          24,000.00       13,000.00              25,000.00         15,000.002          22,000.00        1,000.00               25,000.00           03          25,000.00        0                           20,000.00          04          25,000.00        0                          43,000.00           21,000.005          17,500.00        7,500.00               20,000.00           5,000.00 P1: NPV                                                   P2: NPVThen, a) by using a built-in/Excel function, calculate the NPV for each project with discount rates of 3% and 7%, respectively;b) By comparing the NPVs at the rate of…

Problem #6 - Capital Budgeting Techniques a) If a project costs $74,000 and will earn $24,000 per year for the next four years, and has a discount rate of 5%, what is the: Final Assessment: Outline and Rubric Fundamentals of Finance Final Assessment: Outline and Rubric 1) Payback period 2) IRR 2

Answer in Excel, Attached it question.

Consider the following data table for Projects A, B and C. Annual Initial Investmen Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Discount Inflation t Year 1 Year 3⚫ Year 3 Year 4 Year 5 Rate Rate PROJECT A $40,000 $20,000 $20,000 $30,000 $40,000 $40,000 10% 5% PROJECT B $100,000 $40,000 $50,000 $60,000 $65,000 $70,000 8% 3% PROJECT C $100,000 $50,000 $100,000 $15,000 $80,000 6% 5% a) Compare NPVs among Projects A, B and C (showing your calculations). Which project is the most profitable?

can u explain in excel how did they get this value, some areas

What formula to use to find Payback Period and NPV? (in Excel)

Consider the following two projects: Project Year 0 Year 1 Year 2 Cash Flow Cash Flow Cash Flow A B - 100 -73 40 30 30 The profitability index for project B is closest to: OA. 25.99 B. 0.1 O C. 17.33 O D. 0.17 50 Year 3 Cash Flow 60 30 Year 4 Cash Flow N/A 30 Discount Rate 0.15 0.15

Consider the following two projects: Project Year 0 Year 1 Cash Flow Cash Flow A B - 100 -73 40 30 OA. 2.7 years OB. 2 years OC. 2.3 years D. 2.5 years Year 2 Cash Flow 50 30 The payback period for project A is closest to Year 3 Cash Flow 40 30 *** Year 4 Cash Flow N/A 30 Discount Rate 0.1 0.1

Ch. 6. Capital Budgeting with Inflation. For questions 7 and 8 use the following information. Consider the following cash flows on two mutually exclusive projects: Year Project A Project B 0 -$60,000 -$75,000 1 $38,000 $40,000 2 $36,000 $42,000 3 $29,000 $46,000 The cash flows of Project A are expressed in real terms, whereas those of Project B are expressed in nominal terms. The appropriate nominal discount rate is 12 percent and the inflation rate is 3 percent. What is the NPV for Project B? Round to the nearest cent and format as "XX,XXX.XX"

Ch. 6.  Capital Budgeting with Inflation. For questions 7 and 8 use the following information. Consider the following cash flows on two mutually exclusive projects: Year Project A Project B 0 -$60,000 -$75,000 1 $38,000 $40,000 2 $36,000 $42,000 3 $29,000 $46,000 The cash flows of Project A are expressed in real terms, whereas those of Project B are expressed in nominal terms. The appropriate nominal discount rate is 12 percent and the inflation rate is 3 percent. What is the NPV for Project A?

Given the following information, calculate the Internal Rate of Return (IRR) for the following cash flow. Hint: use linear interpolation method for discount rates 2% and 12%. Project costs and benefits Cash Outflow Year 0 Cash Inflow Year 1 Cash Inflow Year 2 Cash Inflow Year 3 Project -$2580 $977 $930 $955

Suppose that you are working as a capital budgeting analyst in a finance department of a firm and you are going to evaluate two mutually exclusive projects by implementing different capital budgeting techniques. The cash flows for these two projects are given below. YEAR   /   CASH FLOW (A)   /CASH FLOW (B)0              -$17,000                -$17,0001               8,000                      2,0002               7,000                      5,0003               5,000                      9,0004               3,000                      9,500 a. Calculate the Payback Period of each project. Which project should you accept according to this method? Explain whether the Payback Period is or is not an appropriate method in this case. b. Suppose that the discount rate is 11%. Calculate the Net Present Values (NPV) of both projects. Which project should you accept according to NPV? Evaluate your findings. c. Calculate the Internal Rate of Returns (IRR) for both projects (use excel). Which…

MACRS depreciation percentages Table is also attached

Can you tell me how to get the 0% to 25% rate numbers? I have to plot the NPV profiles. Year Project A Discounted cashflow Discounted cashflow 0 -50,000 -$50,000.00 -$50,000.00 1 25,000 $22,727.27 $23,584.91 2 20,000 $16,528.93 $17,799.93 3 10,000 $7,513.15 $8,396.19 4 5,000 $3,415.07 $3,960.47 5 5,000 $3,104.61 $3,736.29   NPV $3,289.02 $7,477.79   IRR 14% 14%             10% 6% Year Project B Discounted cashflow Discounted cashflow 0 -50,000 -$50,000.00 -$50,000.00 1 15,000 $13,636.36 $14,150.94 2 15,000 $12,396.69 $13,349.95 3 15,000 $11,269.72 $12,594.29 4 15,000 $10,245.20 $11,881.40 5 15,000 $9,313.82 $11,208.87   NPV $6,861.80 $13,185.46   IRR 15% 15%   Rate Project A Project B 0%     1%     2%     3%     4%     5%     6%     7%     8%     9%     10%     11%     12%     13%     14%     15%     16%     17%     18%     19%     20%     21%     22%     23%     24%     25%

Capital Budgeting   Assume you are evaluating two mutually exclusive projects, the cash flows of which appear below and that your company uses a cost of capital of 13% to evaluate projects such as these.     Time Project A Cash Flows Project B Cash Flows 0 -$46,800 -$63,600 1 -21,600 20,400 2 43,200 20,400 3 43,200 20,400 4 43,200 20,400 5 -28,800 20,400     Under what conditions on the cost of capital should project B be preferred to project A?