7. Consider the following table for the cash flows of an investment account: Fund value before contribution Time mm/dd/yy 01/01/2015 04/01/2015 08/01/2015 12/31/2015 Contribution -300 +2,000 (a) Calculate the TWRR and the DWRR of the fund. (b) Comment on the results. 1,000 500 250 2,800
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- You need to know the profitability of an investment fund where the amount to invest is $ 17,000, the amount of initial participation value is 3.1235 and at the end of the period is 4.456, what is the profitability of the fund?The performance of an investment fund is to be evaluated over a two year period starting from 1st January 2017 . The given fund had a value of £9.21 mil on the 1st January 2017 that had increased to £14.07 mil by the 1st January 2019. During this period, the fund had received a net cash flow of £352,000 on the 1st July 2017 that was followed by a further net cash flow of £943,000 on the 1st January 2018. It is estimated that immediately before the receipt of these net cash flows the fund had a value of £9.68mil and £12.86mil, respectively. For the given 2-year valuation period calculate, to the nearest 0.1%, the following annual effective rates of return: a) The time-weighted rate of return earned on the fund; b) The money-weighted rate of return earned on the fund; c) The linked internal rate of return using sub-intervals of a calendar year. correct answers; a)=17.19117, b)=16.62410, c)=17.38913 (no tables, only formulas )First United Bank Inc. is evaluating three capital investment projects using the net present value method. Relevant data related to the projects are summarized as follows: BranchOfficeExpansion ComputerSystemUpgrade ATMKioskExpansion Amount to be invested $686,053 $516,654 $295,458 Annual net cash flows: Year 1 411,000 288,000 177,000 Year 2 382,000 259,000 122,000 Year 3 349,000 230,000 89,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Required: 1. Assuming that the desired rate of return is 20%, prepare a net present value analysis for each project. Use the…
- How much external funds would Batik Company need? Negative EFN of ₱81,705 Positive EFN of ₱81,705 Negative EFN of ₱385,675 Positive EFN of ₱385,6751. For the year 2020, the permanent fund requirement of DICE Co. has been estimated as P 70,000. The total fund requirements are given as follows: Current Assets. Fixed AssetsFirst Quarter. 20,000 60,000Second quarter. 27,500. 60,000Third quarter 30,000. 60,000Fourth quarter 19,000. 60,000 a). Compute for the seasonal fund requirements b) Compute for the following under aggressive and conservative strategies: 1. short-term funds 2. working capital excessFransico Ltd. is trying to determine which of three projects it wants to invest in. All three projects have been analyzed into Net Present Value amounts. (Round your answers to two decimal places when needed and use rounded answers for all future calculations). 1. Calculate the Net Present Value based on the following information: Cash Flows Project 2 Project 6 Project 12 Present Value of net cash inflows $491,900 $778,300 $503,700 Initial InvestmentSingle line $146,000Single line $407,400Single line $206,400Single line Single lineNet Present ValueDouble line Single lineDouble line Single lineDouble line Single lineDouble line 2. Calculate the Profitability Index for each of the projects. Round to two decimal places. Project Present value of net cash inflows / Initial Investment = Profitability Index 2 / = 6 / = 12 / = 3. Based on the Profitability Index, which project should be selected?
- 1. For the year 2020, the permanent fund requirement of DICE Co. has been estimated as P 70,000. The total fund requirements are given as follows: Current Assets. Fixed AssetsFirst Quarter. 20,000 60,000Second quarter. 27,500. 60,000Third quarter 30,000. 60,000Fourth quarter 19,000. 60,000 a). Compute for the seasonal fund requirements b) Compute for the following under aggressive and conservative strategies: 1. Total fund requirements 2. long-term fund 3. short-term funds 4. working capital excessBased on the following, obtain the Incremental Cash Flow and determine the NPV (12% discount) for the project: \begin{tabular}{|l|r|r|r|r|r|r|} \hline & \multicolumn{6}{|c|}{ Year } \\ \hline & & 1 & 2 & 3 & 4 & 5 \\ \hline Investment i Show Transcribed Text $403.93 $280.28 $356.63 $179.41Legarda Company uses a 12% hurdle rate for all capital expenditures. It screens investments using three evaluation techniques: the net present value, the profitability index, and the internal rate of return. It has lined up four projects with the following information. A B C D Initial cash outflow 400,000 596,000 496,000 544,000 Annual cash inflows Year 1 130,000 200,000 160,000 190,000 2 140,000 270,000 190,000 250,000 3 180,000 180,000 180,000 4 130,000 160,000 120,000 If the company has a capital budget of P1,500,000, what projects should be pursued based on the three criteria? Show necessary computations on your solution.
- 1. For the year 2020, the permanent fund requirement of DICE Co. has been estimated as P 70,000. The total fund requirements are given as follows: Current Assets. Fixed AssetsFirst Quarter. 20,000 60,000Second quarter. 27,500. 60,000Third quarter 30,000. 60,000Fourth quarter 19,000. 60,000 a). Compute for the seasonal fund requirementsA Company is attempting to select the best of three mutually exclusive projects.The initial investment and after-tax cash inflows associated with these projects are shown in thefollowing table. Cash flow Project A Project B Project CInitial Investment 100000 120,000 130,000Year 1 Cash Inflows 30000 36,500 38000Year 2 cash inflows 35000 45000 20000Year 3 cash inflows 40000 40000 42000Year 4 cash inflows 38000 35000 45000Year 5 cash inflows 20000 30000 50000 Taking into consideration that the cost of debt 7%, cost of preferred stock 12% and cost of new common stock 15%. The weight of each source of capital are long term debt 30% , preferred stock 20% and common stock equity 50%. Create a spreadsheet to answer the following questions:a) Calculate the firm‘s cost of capital (WACC) "Answered Before"b) Calculate the payback period for each project. "Answered Before"c) Calculate the net present value (NPV) of each project,d) Calculate the internal rate of return (IRR) for each project.e)…A Company is attempting to select the best of three mutually exclusive projects.The initial investment and after-tax cash inflows associated with these projects are shown in thefollowing table. Cash flow Project A Project B Project CInitial Investment 100000 120,000 130,000Year 1 Cash Inflows 30000 36,500 38000Year 2 cash inflows 35000 45000 20000Year 3 cash inflows 40000 40000 42000Year 4 cash inflows 38000 35000 45000Year 5 cash inflows 20000 30000 50000 Taking into consideration that the cost of debt 7%, cost of preferred stock 12% and cost of new common stock 15%. The weight of each source of capital are long term debt 30% , preferred stock 20% and common stock equity 50%. Create a spreadsheet to answer the following questions:a) Calculate the firm‘s cost of capital (WACC)b) Calculate the payback period for each project.c) Calculate the net present value (NPV) of each project,d) Calculate the internal rate of return (IRR) for each project.e) Discuss any conflict in ranking that may…
