Excel Risk Assignment 2 Spreadsheet (3)

The five alternatives shown below are being evaluated by the rate of return method. Incremental ROR when compared with alternative B C D 27.3 9.4 35.3 25 E 1.5 38.5 24.4 Alt B D E Initial Invest, $ ROR vs DN,% 9.6 15.1 -25,000 -35,000 -40,000 -60,000 -75,000 13.4 25.4 20.2 A --- --- (d) Alt D 46.5 27.3 6.8 ... If the projects are mutually exclusive and the Minimum Attractive Rate of Return is 9.2% per year, the best alternative is: (a) Alt A (b) Alt B (c) Alt C (e) Alt E

Four alternatives (Alternatives A, B, C, and D) described below are being evaluated. Incremental Rate of Return, %, When Compared with Alternative B Alternative A B C D Initial Investment, $ - 30,000 - 71,000 - 95,000 - 110,000 Overall Rate of Return. % 16.9 15 17.5 10 A 18.7 19.2 16.7 15 C 10 1) A) If the alternatives are independent, which one(s) should be selected at a MARR of 15% per year? There is no budget limit. B) If the alternatives are mutually exclusive (ME), which one should be selected at a MARR of 17% per year? {Hint: Consider Do Nothing (DN)} 2) B/C Analysis - Single Project: Calculate the conventional B/C ratio for a county government project that is predicted to have the following cash flows: • Costs of $1,900,000 per year • Benefits of $2,100, 000 per year Disbenefits of $250,000 per year. Should the county government invest in that project? Please explain your answer. (meaning: explain why you think the government should or should not invest in the project). 3)…

Based on the information below  which projects will we choose based on weighted average profitabiltity Index if we only have OMR500,000 to invest? Project NPV Investment PI A 130,000 200,000   B 241,250 225,000   C 294,250 275,000   D 262,000 250,000                     Select one: a. WAPI AD b. WAPI AB c. WAPI BD d. WAPI BC

1. The president of the Martin Company is considering two alternative invest- ments, X and Y. If each investment is carried out, there are four possible outcomes. The present value of net profit and probability of each outcome follow: Investment X Investment Y Net Present Net Present Outcome Value Probability Outcome Value $12 million Probability 0.1 $20 million 0.2 A 8 million 10 million 2 0.3 B 9 million 0.3 3 0.4 6 million 0.1 3 million 0.1 D 11 million 0.5 a. What are the expected present value, standard deviation, and coefficient of variation of investment X? b. What are the expected present value, standard deviation, and coefficient of variation of investment Y? c. Which investment is riskier? d. The president of the Martin Company has the utility function

An investment firm is considering two alternative investments, A and B, under two possible future sets of economic conditions, good and poor. There is a .60 probability of good economic conditions occurring and a .40 probability of poor economic conditions occurring. The expected gains and losses under each economic type of conditions are shown in the following table: Economic Conditions Investment Good Poor A $900,000 –$800,000 B 120,000 70,000 Using the expected value of each investment alternative, determine which should be selected.

Subject: accounting

Accounting question

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

How I resolve this problems please give me the detail A firm has the following investment alternatives: Year                A                         B                            C 1                     $400                   $---                      $---- 2                       400                   400                    ---- 3                       400                   800                   ---- 4                      400                   800                    1,800   Each investment cost  of capital is 10 percent a. What is each investment's internal rate of return? b. Should the firm make any of theses investment? C. What is each investemtn's net present value? d. Should the firm make any of these investment

Calculate the Following for the question:   i) NPV of investment i-a) Based on above NPV, is IRR higher or lower than 6%   ii) IRR for the investment   iii) Determine simple payback period using iii-a) before-tax cash flows iii-b) After-tax cash flows   iv) Determine discounted payback period using after tax cash flows   v) Find ARR   vi) Calcualte profitability index for the investment

Suppose the following two independent investment opportunities are available to a company. The appropriate discount rate is 8 percent. Year O 1 2 3 Project Alpha -$4,500 b. 2,300 2,200 1,450 a. Compute the profitability index for each of the two projects. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Project Alpha Project Beta Project Beta -$ 6,100 1,350 4,500 4,000 Profitability Index Which project(s), if either, should the company accept based on the profitability index rule? Project Alpha O Project Beta Neither project O Both projects

For the four revenue alternatives below, use the ROR method results to answer the question below Alternative A B с D Initial Investment, $ -60,000 -90,000 -140,000 -190,000 Alternative D Overall ROR, Ai*% When Compared with Alternative ¡*% A B с 11.7 22.2 17.9 15.8 43.3 22.5 17.8 10.0 10.0 Problem 08.034.c- Choose from more than two alternatives based on incremental ROR analysis ✓should be selected. 10.0 Which one should be selected if the MARR is 10% per year and the alternatives are mutually exclusive?

Saved A company is considering the following three Investment projects (Ignore income taxes.): Investment required Present value of cash inflows Project C $46,800 $ 51,948 Project D $ 53,300 $ 61,828 Project E $110,500 $ 120,445 Rank the projects according to the profitablity index, from most profitable to least profitable. Multiple Choice D. C. E C.E. D E. C. D E. D. C

1. Accounting Rate of Return on average investment of Project A (expressed to twodecimal places). 1.2 Net Present Value of both projects. 1.3 Internal Rate of Return of Project B (expressed to two decimal places) usinginterpolation

Consider the following two projects: Project Year 0 Year 1 Year 2 Year 3 Year 4 Discount Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Rate A - 100 40 50 60 N/A 0.18 B - 73 30 30 30 30 0.18 Assume that projects A and B are mutually exclusive. The correct investment decision and the best rationale for that decision is to A. invest in project B, since NPV, > NPV, A B. invest in project A, since NPV, > 0. OC. invest in project A, since NPV, IRR, A'

Consider the following information regarding a new investment that a company intends to undertake:. State of the Economy Probability Market Return Investment Return Expansion 0.30 40% 60% Normal 0.50 10% 25% Recession 0.20 -15% -40% b). Compute the correlation between the market the investment return

Q.2. For an investor with a minimum rate of return of 8.0%: a) Rank the following non-mutually exclusive alternative. b) For a time zero budget of $1,400, which of the projects would you select? Use NPV, GRR and PI analysis. Year 0 1 2 3 4 Project A  -$200  $75   $75   $75   $75 Project B  -$450  $155   $155   $155   $155 Project C  -$700  $250   $250   $250   $250 Project D  -$950  $380 $330 $280 $230

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The table below shows the internal rate of return (IRR%) for three investment projects A, B and C and their differences. According to capital investment A С>В b. A>B>C C. C>B>A d. B>C>A е. С>А>В

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