A Company is considering an investment proposal, involving an initial cash outlay of TZS450,000. The proposal has an expected life of 7 years and zero salvage value. At arequired rate of return of 12 percent, the proposal has a profitability index of 1.182.Required:Calculate annual cash inflows.

The objective of the question is to calculate the annual cash inflows of an investment proposal…

Answered: A Company is considering an investment…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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If a copy center is considering the purchase of a new copy machine with an initial investment cost of $162,500 and the center expects an annual net cash flow of $25,000 per year, what is the payback period? fill in the blank years
TSB machine project is a nonprofit organization and the expected additional operating cash inflows are $130,000 in years 1 through 5. The net initial investment is $392,500. A five year useful life, no terminal disposal value, and an 8% Required Rate of Return. Required: Calculate the following: Net present value, Internal rate of return, Reverse Payback Period, Break even time, and Profitability Index.
NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is considering. The initial investment is $37,770, and the project will yield cash inflows of $5,000 per year for 12 years. The firm has a cost of capital of 15%. a. Determine the net present value (NPV) for the project. b. Determine the internal rate of return (IRR) for the project. c. Would you recommend that the firm accept or reject the project? a. The NPV of the project is $ (Round to the nearest cent)
NOVA Company is considering a long-term investment project called STUDY. STUDY will require an investment of $125,190. It will have a useful life of 4 years and no salvage value. Annual cash inflows would increase by $79,000, and annual cash outflows would increase by $40,000. Compute the cash payback period. O 3.21 years O 1.23 years O 1.58 years O 4 years
Solve the attahment.
Haresh
s
For each of the following problems, (a) draw the cash flow diagram; (b) present clean and clear manual solutions to the problem; (c) highlight the final answer (only the final answer as required by the problem) by enclosing it within a box. An asset costs $20,000 today. If inflation is 6% per year and interest is 10% per year, what will be the appropriate future value of the machine adjusted for inflation in 5 years?
Folsom Advertising, Inc. is considering an investment in a new information system. The newsystem requires an investment of $1,800,000 and either has (a) even cash flows of $750,000 peryear or (b) the following expected annual cash flows: $450,000, $225,000, $600,000, $600,000,and $150,000.Required:Calculate the payback period for each case.
A project has an initial cost of $35,000 and produces cash flows of $20,000, $15,000, $10,000, and $5,000 over the next four years, respectively. The project requires a 13 percent rate of return and has a required discounted payback period of three years. Should the project be accepted? Why or why not?
Pirelli is considering a software development project. It will require a $200,000 initial investment as well as subsequent investments of $50,000 at the end of years three and four. Pirelli expects inflows of $75,000 per year from year three thru nine. a. What is the project's total cash outflows total? b. What is year three's net inflow/outflow?
GTO Incorporated is considering an investment costing $214,720 that results in net cash flows of $32,000 annually for 10 years. (PV of $1. FV of $1. PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) (a) What is the internal rate of return of this investment? (b) The hurdle rate is 8.5%. Should the company invest in this project on the basis of internal rate of return? a. Internal rate of return b. Should the company invest in this project on the basis of internal rate of return? %

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