Homework Ch #24
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School
Temple University *
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Course
5001
Subject
Finance
Date
Jan 9, 2024
Type
PNG
Pages
1
Uploaded by MateFogSardine33
Homework
Ch
#24
€
Submitted
Year
1
Year
2
Year
3
Year
4
Year
5
16.66/16.66
Net
cash
flows
$80,000
$50,000
$70,000
$250,000
$13,000
points
awarded
Beyer
Company
is
considering
buying
an
asset
for
$360,000.
It
is
expected
to
produce
the
following
net
cash
flows.
Compute
the
payback
period
for
this
investment.
(Cumulative
net
cash
outflows
must
be
entered
with
a
minus
sign.
Round
your
Payback
Period
answer
to
2
decimal
places.)
=
e
e
eBook
Initial
investment
$
(3600000
|$
(360,000)
@
5y
Year
1
80,000
@
(280,000)
@
Hint
Year
2
50,000
@
(230,000
@
Year
3
70,000
@
(160,000)
@
=
Year
4
250,000
@
90,000
@
o
Year
5
13,000
@
103,000
@
B
Total
$
103,000
References
Payback
period
=
’
364
@
‘years
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Related Questions
What is the present value of an investment with the following cash flows?
Year 1 $14,000
Year 2 $20, 000
Year 3 $30,000
Year 4. $ 43,000
Year 5. $ 57,000
Use a 7% discount rate, and round your answer to the nearest $1.
a. $128, 487
b. $107, 328
c. $112, 346
d. $ 153, 272
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QUESTION 6
Seaborn Co. has identified an investment project with the following cash flows.
Year Cash Flow
$950
1,050
1,320
1,200
1
2
3
4
If the discount rate is 10 percent, what is the present value of these cash flows?
3542.76
3578.84
3418.66
4470.00
3847.03
Click Save and Submit to save and submit. Click Save All Answers to save all answers.
SEP
28
30
tv ♫
A
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Assume that an investment provides the following cash inflows over a three-year period:
Year 1
Year 2
Year 3
Total
$5,000
5,000
7,000
$ 17,000
Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables
provided.
Assuming a discount rate of 17%, what is the present value of these cash inflows?
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QUESTION 26
Find the IRR of an investment having initial cash outflow of $213,000. The cash flows, and corresponding dates are given below.
($213,000)
1/1/2013
$65,200
$96,000
$73,000
$55,400
A.
B.
8.45%
12.32%
C. 15.67%
D. None of the above
5/7/2014
4/3/2015
6/8/2016
2/9/2017
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Domestic
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Mendez Company has identified an investment project with the following cash flows.
Year
1234
Cash Flow
$ 1,090
940
1,490
1,850
a. If the discount rate is 12 percent, what is the present value of these cash flows?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
b. What is the present value at 15 percent?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
c. What is the present value at 21 percent?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
a. Present value at 12 percent
b. Present value at 15 percent
c. Present value at 21 percent
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Question 17
The net cash flows for two projects, A and B, are as follows:
Year o
3
-220000 -5000 122000 130000
-60000 -10000 -120000 200000
1
2
A
Given a discount rate of 4.5%:
Blank 1: Calculate the net present value of project A.
Blank 2: Estimate the IRR of project A. Write your answer as a percent %. If your
answer has a decimal, round to 2 places.
Blank # 1
Blank # 2
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QUESTION 19
Simkins Renovations Inc. is considering a project that has the following cash flow data. What is the
project's IRR?
Year
Cash flows
A. 28.55%
O B. 24.50%
○ C. 20.88%
O D. 17.63%
○ E. 14.67%
○ F. 11.98%
G. 9.51%
OH. 7.24%
0
-$850
1
2
3
4
$300
$390
$280
$270
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rr
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You are asked to evaluate an investment project with the following cash flows:
Year
1
234.
2
4
Cash Flow
$800
1,090
1,350
1,475
a. If the discount rate is 7 percent, what is the present value of these cash flows? (Do
not round intermediate calculations and round your answer to 2 decimal places,
e.g., 32.16.)
b. What is the present value at 17 percent? (Do not round intermediate calculations
and round your answer to 2 decimal places, e.g., 32.16.)
c. What is the present value at 25 percent? (Do not round intermediate calculations
and round your answer to 2 decimal places, e.g., 32.16.)
a. Present value at 7%
b. Present value at 17%
c. Present value at 25%
$
3,926.98
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22 see picture
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Cash Flows
Project A ($ in millions)
Project B ($ in millions)
Initial Outflow
– 211
– 82
Year 1
43
22
Year 2
71
40
Year 3
66
40
Year 4
65
12
Calculate the payback period of each investment
Which investments does the company accept if the cut-off payback period is three years? Four years?
If the company invests by choosing projects with the shortest payback period, which project would it invest in?
If the company uses discounted payback with a 12% discount rate and a 4-year cut-off period, which projects will it accept?
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Problem 6.
Justine Global Info Tech records the following cash flows at the end of each year for
a project. If the firm's discount rate is 11%, what is the PRESENT VALUE of the
project?
Year
Cash Flow
1
P794,633.00
P542,149.00
P836,200.00
P716,080.00
P520,354.00
2
3
4
5
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11:52
Investment Appraisal (Year 2 Column 2...
35%
4. An investment has the following cash
flows. What is the ARR?
Year 0
-90,000
Year 1
45,000
10,000
Year 2
Year 3
30,000
30,000
Year 4
6%
7%
9%
5. Which of the following investments would
you choose based on payback?
Project
3 years 6 months
5 years 10 months
A
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3 QS 24-1 (Algo) Payback period and equal cash flows LO P1 Park Company is considering an investment of $29,000 that provides net cash flows of $13,400 annually for four years. What is the investment's payback period? Numerator: Initial investment 1 Payback Period Denominator: Annual net cash flow Payback Period Payback period
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