FIN 550 Milestone 3_IO

Exhibit 8-3A firm is evaluating two investment proposals. The following data is provided for the two investment alternatives.     Initial cash outflow IRR NPV(@14%) Project 1 $350m 28% $80m Project 2 $  20m 36% $20m         Refer to Exhibit 8-3. If the two projects are mutually exclusive, which project should the firm choose? What is the problem that the firm should be concerned with in making this decision?   Group of answer choices   project 1; project scale project 2; discount rate project 1; discount rate project 2; project scale

Question Content Area There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,000 and is expected to generate the following cash flows:   First Year Second Year Third Year Total Alpha Project $31,500   $22,500     $5,000   $59,000 Beta Project 7,000   23,000     28,000   58,000 (Click here to see present value and future value tables) A. If the discount rate is 12%, compute the NPV of each project. Round your present value factor to three decimal places and final answer to answer to 2 decimal places. Alpha Project $fill in the blank 1 Beta Project $fill in the blank 2 B. Which project should be recommended.   .Please round off anwsers. Thank you

Question Content Area There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $36,000 and is expected to generate the following cash flows:   First Year Second Year Third Year Total Alpha Project $32,500   $22,000     $4,500   $59,000 Beta Project 8,000   23,000     28,000   59,000 (Click here to see present value and future value tables) A. If the discount rate is 15%, compute the NPV of each project. Round your present value factor to three decimal places and final answer to answer to 2 decimal places. Alpha Project $fill in the blank 1 Beta Project $fill in the blank 2 B. Which project should be recommended.     .

which one is correct please confirm? QUESTION 19 Whipple Industries Inc. is in the process of determining its optimal capital budget for next year. The following investment projects are under consideration:   Required Expected Rate Project Investment of Return A $2 million   20.0% B $3 million 15.0% C $1 million 13.5% D $4 million 13.0% E $1 million 12.5% F $3 million 12.0% G $5 million 11.5% ​ The firm's marginal cost of capital schedule is as follows: Amount of   Funds Raised Cost $0 - $6 million 12.0% $6 million - $12 million 12.5% $12 million - $18 million 13.5% Over $18 million 15.0% ​ Determine Whipple's optimal capital budget (in dollars) for the coming year.   a. $5 million   b. $10 million   c. $14 million   d. $11 million

Q. 1 purchase of equipment in the coming year. The capital budget is limited to $5,000,000 for the year. Lori Alleyne, staff analyst at McGloire's, is preparing an analysis of the three projects under consideration by Joyanne McGloire, the company's owner. McGloire Construction is analyzing its capital expenditure proposals for the A в D Project A Project B Project C 1 Projected cash outflow Net initial investment 2 3 $3 000 000 $1 500 000 $4 000 000 4 5 Projected cash inflows Year 1 $1 000 000 1 000 000 1 000 000 1 000 000 $ 400 000 $2 000 000 7 Year 2 900 000 2 000 000 8 Year 3 800 000 200 000 Year 4 100 000 10 11 Required rate of return 10% 10% 10% 1. Because the company's cash is limited, McGloire thinks the payback method should be used to choose between the capital budgeting projects. a. List two benefits and two limitations of using the payback method to choose between projects? b. Calculate the payback period for each of the three project Ignore income taxes. Using the payback…

Simple Investment Allocation Case: This year, 2022 ABM Company selected your team to manage their allotted budget amounting to 10 million pesos for investment diversification portfolio. Your team was assigned to handle the said account. What would you choose? Other investment assets or Alternatives to fixed income and equities

Simple Investment Allocation Case: This year, 2022 ABM Company selected your team to manage their allotted budget amounting to 10 million pesos for investment diversification portfolio. Your team was assigned to handle the said account. Question: How would you allocate funds?

Question 1: Salalalh Methanol company management is considering three competing investment Projects A, B & C Year Initial Investment Project A Project B 12000 4150 5260 Project C 12000 12000 1200 3100 5225 3 4 Assume a discount Rate of 5.45 % 3800 4600 7360 9460 8250 9275 9300 Use the information above and help the management in choosing the most desirable Project using Payback period

Problem 2 ABM Enterprise would like to evaluate/analyze an investment proposal. Given the following: Investment amount 450,000 (2022) Dividends / Revenue stream - 100,000 for the first year and an interval of 5,000 for the succeeding years Discount rate - 14% a. NPV for the perio 2023 through 2029; b. Total NPV using manual computation; c. Total NPV using the Excel function; and d. IRR rate.

4 Book Consider two mutually exclusive new product launch projects that Nagano Golf is considering. Assume that the discount rate for Nagano Golf is 16 percent Project A Nagano NP-30. Professional clubs that will take an initial investment of $971,000 at time 0. Next five years (years 1-5) of sales will generate a consistent cash flow of $440,000 per year. Introduction of new product at year 6 will terminate further cash flows from this project Project B Nagano NX-20 High-end amateur clubs that will take an initial investment of $700,000 at time 0. Cash flow at year 1 is $290,000. In each subsequent year, cash flow will grow at 10 percent per year. Introduction of new product at year 6 will terminate further cash flows from this project. Year e 1 2 3 4 NP-30 -$971,000 440,000 440,000 440,000 440,000 440,000 NX-20 -$700,000 290,000 319,000 350,900 Net present value Internal rate of return 385,990 424,589 Complete the following table: (Do not round intermediate calculations. Round the…

Question 1: Salalalh Methanol company management is considering three competing investment Projects A, B & C Year Initial Investment 1 2 Project A Project B 12000 4150 Project C 12000 12000 5225 8250 1200 3100 3800 4600 Assume a discount Rate of 5.45 % 5260 7360 9460 9275 9300 4 Use the information above and help the management in choosing the most desirable Project using Payback period, Discounted payback Net Present value and Profitability Index. Out of the four methods which is considered to be the most desirable. Explain

Question 17 of 30 View Policies -/0.35 : Current Attempt in Progress Crane Corp. management is planning to convert an existing warehouse into a new plant that will increase its production capacity by 45 percent. The cost of this project will be $6,484,859. It will result in additional cash flows of $1,710,200 for the next eight years. The discount rate is 12.92 percent. Excel Template (Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen for easy reference to the values you've been given here, and be sure to update any values that may have been pre-entered in the template based on the textbook version of the problem.) a. What is the payback period? (Round answer to 2 decimal places, e.g. 15.25) The project's payback period is years b. What is the NPV for this project? (Round intermediate calculations and final answers to O…

19 es TB MC Qu. 14-36 (Algo) Moates Corporation has... Moates Corporation has provided the following data concerning an investment project that it is considering: $ 190,000 $ 120,000 per year 4 years 9% Initial investment Annual cash flow Expected life of the project Discount rate Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the project is closest to: Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Multiple Choice $190,000 $198,680 $(70,000)

ES Question 14 What is the IRR for the following project if its initial after-tax cost is $5,000,000 and is expected to provide an after-tax operating cash outflow of -$1,800,000 in year 1, followed by inflows of $2,900,000 in year 2, $0 in year 3, $2,700,000 in year 4, and $2,300,000 in year 5? O 5.83% O 31.53% O None of the four possible given answer is correct 11.44% O 9.67%

QUESTION 8 The INTERNAL RATE OF RETURN for the project shown above is: O 3.92% O 13.25 O 15.17% 9 21.22% O No IRR QUESTION 9

Question 22 The area manager of ARC is considering two possible expansion alternatives. The required investments, expected contribution margin and controllable margins of each are as follows: Project Investment Contribution margin $200,000 $80,000 001 002 $600,000 $180,000 ARC Division has curently $2,000,000 in invested capital, a contribution margin margin of $300,000. If project 002 is implemented, the ARC's ROI will be decimals) Controllable margin $35,000 $50,000 of $550,000 and a controllable % (rounded 3

Practical Question The total investment required for two projects are estimated at OMR100, 000. The cash flows expected from the two projects for the first four years are explained in the table below. Year Project A Project B Year 1 15,000 15,000 Year 2 28,500 40,000 Year 3 40,000 21,500 Year 4 50,000 35,000 Use the above information and advise which project to select based on payback period method 11 直 hp

Problem #2 - Chapter 13 – Preference Ranking for Investment Projects The management of Revco Products is exploring four different investment opportunities, Information on the four projects under study follows: Project C (450,000) 522,970 72,970 Project B (360,000) 433,400 73,400 Project A Description Investment Required ($) Present value of Cash Inflows ($) Net Present Value ($) Life of the Project (in years) Project D (270,000) 336,140 66,140 (480,000) 567,270 87,270 6 3 12 6 Internal Rate of Return (%) 18% 19% 14% 16% Because the company's required rate of return is 10%, a 10% discount rate has been used in the present value computations above. Limited funds are available for the investment, so the company cannot accept all the available projects. 1) Compute the project profitability index for each investment project. 2) Rank the four projects according to preference in terms of the following metrics: Net Present Value b. Project Profitability Index Internal Rate of Return a. c. 3)…

NPV: Basic Concepts Buena Vision Clinic is considering an investment that requires an outlay of $600,000 and promises a net cash inflow one year from now of $810,000. Assume the cost of capital is 10 percent. The present value tables provided in Exhibit 19B.1 and Exhibit 19B.2 must be used to solve the following problems. Required: 1. Break the $810,000 future cash inflow into the three components shown below. Enter all your answers as positive amounts. a. The return of the original investment $ 600,000 b. The cost of capital $ 60,000 c. The profit earned on the investment $150,000 2. Now, compute the present value of the profit earned on the investment.$136,350 3. Compute the NPV of the investment. When required, round your answer to the nearest dollar.$

NPV: Basic Concepts Buena Vision Clinic is considering an investment that requires an outlay of $600,000 and promises a net cash inflow one year from now of $810,000. Assume the cost of capital is 10 percent. The present value tables provided in Exhibit 19B.1 and Exhibit 19B.2 must be used to solve the following problems. Required: 1. Break the $810,000 future cash inflow into the three components shown below. Enter all your answers as positive amounts. a. The return of the original investment b. The cost of capital c. The profit earned on the investment 2. Now, compute the present value of the profit earned on the investment. $ 136,350 ✓ 600,000 ✓ 60,000 ✓ 150,000 ✓ 3. Compute the NPV of the investment. When required, round your answer to the nearest dollar. $ Compare this with the present value of the profit computed in Requirement 2. What does this tell you about the meaning of NPV? Net present value represents the present value of future profits ✓

Exhibit 8-3A firm is evaluating two investment proposals. The following data is provided for the two investment alternatives.     Initial cash outflow IRR NPV(@14%) Project 1 $350m 28% $80m Project 2 $  20m 36% $20m         Refer to Exhibit 8-3. If the two projects are independent, which project should the firm choose based on the IRR rule?   Group of answer choices   cannot decide because the hurdle rate is unknown project 1 project 2 both projects

Question 16 of 30 View Policies Current Attempt in Progress -/0.35 ⠀ Crane Crafts Corp. management is evaluating two independent capital projects that will each cost the company $200,000. The two projects will provide the following cash flows: Year Project A Project B 1 $66,750 $26,450 2 93,450 66,125 3 34,235 143,250 4 151,655 98,110 (a1) What is the payback period of both projects? (Round answers to 2 decimal places, e.g. 15.25.) The Payback of Project A is years and Project B is eTextbook and Media Save for Later Using multiple attempts will impact your score. 20% score reduction after attempt 2 years. Attempts: 0 of 3 used Submit Answer (a2) The parts of this question must be completed in order. This part will be available when you complete the part above. Search ♡

QUESTION SIX (6) Sunrise Industries has four potential projects all with an initial cost of $1,800,000. The capital budget for the year will only allow Sunrise Industries to accept one of the four projects. Find the Net Present Value (NPV) for each of the project with the given discount rates, and decide whether the project should be accepted or rejected. |Cash Flows Project A Project B Project C Project D Year one $350,000 $400,000 $700,000 $200,000 Year two Year three Year four $350,000 $400,000 $600,000 | $400,000 $350,000 $400,000 $500,000 $600,000 $350,000 $400,000 $400,000 $800,000 Year five $350,000 $400,000 $300,000 $1,000,000 Discount Rate 5% 9% 14% 19%

Question 6   A project has expected cash inflows, starting with year 1, of $2,200, $2,900, $3,500 and finally in year four, $4,000. The profitability index is 1.14 and the discount rate is 12 percent. What is the initial cost of the project?    Group of answer choices   $9,211.06 $9,250.00 $8,166.19 $7,899.16 $8,098.24

Homework, Chapter 26 Cash Payback Period for a Service Company Jane's Clothing Inc. is evaluating two capital investment proposals for a retail outlet, each requiring an investment of $150,000 and each with an eight-year life and expected total net cash flows of $240,000. Location 1 is expected to provide equal annual net cash flows of $30,000, and Location 2 is expected to have the following unequal annual net cash flows: Year 1 $68,000 Year 2 51,000 Year 3 31,000 Year 4 29,000 Year 5 22,000 Year 6 16,000 Year 7 13,000 Year 8 10,000 Determine the cash payback period for both location proposals. Location 1 years Location 2 years

Question list ✔Question 1 Data table A 1 2 Projected cash outflow 3 Net initial investment 4 Projected cash inflows 5 Year 1 6 Year 2 7 Year 3 8 Year 4 9 Required rate of return ↑ Lulus Construction is analyzing its capital expenditure proposals for the purchase of equipment in the coming year. The capital budget is limited to $12,000,000 for the year. Lyssa Bickerson, staff analyst at Lulus, is preparing an analysis of the three projects under consideration by Caden Lulus, the company's owner. (Click the icon to view the data for the three projects.) Present Value of $1 table Read the requirements. B Project A с Project B Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table D Project C $ 6,000,000 $ 4,000,000 $8,000,000 8% $ 2,050,000 $ 1,100,000 $4,700,000 2,050,000 2,300,000 4,700,000 2,050,000 700,000 50,000 2,050,000 25,000 8% 8% Requirements 1. Because the company's cash is limited, Lulus thinks the payback method should be used to…

Porter Company is analyzing two potential investments Initial investment Net cash flow: Year 1 Year 2 Year 3 Year 4 Project X Project Y $ 75,900 $ 64,000 26,000 26,000 26,000 4,400 28,000 28,000 20,000 If the company is using the payback period method, and it requires a payback of three years or less, which project(s) should be selected? 0