Answered: A manufacturer projects the cash flows…

A manufacturer projects the cash flows shown below. Determine the rate of return if the cash flows occur as projected. Year Cash Flow, $ 0 -733,000 1 -467,000 2 215,000 3 279,000 4 – 8 309,000

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter13: Capital Budgeting: Estimating Cash Flows And Analyzing Risk

Section: Chapter Questions

Problem 4MC

See similar textbooks

Related questions

Q: What is the IRR of the following set of cash flows? (Do not round intermediate calculations and…

A: Year Cash flow 0 -17100 1 7800 2 9100 3 7600

Q: An arithmetic cash flow gradient series equals $500 in year 1, $600 in year 2, and amounts…

A: Computation:

Q: An arithmetic cash flow gradient series equals $800 in year 1, $900 in year 2, and amounts…

A: A cash flow series is a series of equal payments, that is, in a cash flow series there are regular…

Q: Compute the rate of return represented by the cash flow. Year Cash Flow -S20, 000 6, 000 6, 500 3 7,…

A: In order to determine the profitability the rate of return is used by the management, it helps to…

Q: Consider the mixed streams of cash flows shown in the following table. YEAR A B 1 $50,000 $10,000 2…

A: We need to calculate present value future cash flows using this formula PV =FV(1+r)n Where PV…

Q: From the following data, calculate Internal R

A: The internal rate of return can be calculated as follows :

Q: Q2: Given the cash flow below, use Descarte's Rule and Norstrom's Criteria to check for the number…

A: Descrate’s rule state that the total number of i* is always less than or equal to the number of sign…

Q: What is the IRR of the following set of cash flows? Year Cash Flow -$9,625 4,000 4,100 3. 6,200…

A: The question is related to Capital Budgeting and is of Internal Rate of Return. The IRR is the rate…

Q: Given the cash flow below, select the standard notations that used to find the present worth i- 996…

A: For the given cash flow diagram the present worth is given as ,

Q: Net Cash Flow - $12,000 $4,720 $5,570 $6,570 1) ΕΟΥ 2 3 Determine the IRR (to the nearest whole %)…

A: IRR is the internal rate of return at which net present value is equal to zero.

Q: Consider the following cash flows: Year Cash Flow -$4,800 1,400 2,500 1,200 900 What is the payback…

A: pay back period is the number of years, it will take to recover the initial investment made in a…

Q: Compute the present value for the cash flow diagram shown below if i=6%, compounded annually. $500…

A: Year Cash Flow 1 300.00 2 300.00 3 300.00 4 100.00 5 200.00 6 300.00 7 400.00 8…

Q: What is the IRR of the following set of cash flows? Year Cash Flow 0 –$9,531 1 4,200 2 5,500 3 4,400

A: Year Cash flow 0 -9531 1 4200 2 5500 3 4400

Q: family business has the cash flow series has presented below. Year 1 2 Revenues ($) Costs ($) 30,500…

A: External rate of return (ERR) is the rate of return earned from an investment or a project, if there…

Q: For this cash flow diagram, which period has the greatest receipt of income? Unequal Cash Flows…

A: Solution: Cash flow diagram is the diagram in which the cash inflows and cash outflows of the…

Q: For the cash flow diagram given below, compute the rate of return. $400 $350 $300 $250 $200 $150 1 2…

A: The question is based on the concept of Financial Management. Internal rate of return is the rate at…

Q: The projected cash flows in the first year of operation for Angry Birds Inc. are given below.…

A: Cash flows is the cash generated from operations.

Q: Solve the attachment.

A: Cash flow: Cash flow refers to the amount of cash and cash equivalent which flows in and out of the…

Q: X = ? 10,000 A1 = 20,000 30,000 A2 = 40,000 %3D

A: Let CFn = Cashflow in year n CF4 = CF5 = CF6 = A1 = $20000 CF7 = CF8 = A2 = $40000 CF9 = $10000 CF11…

Q: For the arithmatic gradient of cash flow given below, if G= $150 , the value at year 24(V2

A: 'G' refers to the amount by which cash flows increases every year.

Q: Assume a firm generates $2,200 in slaes and has a $300 increase in accounts recieveables during an…

A: Statement of cash flows: Statement of cash flow is a financial statement that shows the cash and…

Q: W $1,000 $1,000 1 3 4 7 End of Year End of Year $1,000

A: Computation of net present value for the left hand side is as…

Q: First draw a cash flow diagram for the cash flow series shown below. Then write an expression (e.g.,…

A: a) Cash flow diagram is as follows:

Q: Assuming today is 1st January 2021. Date Cash flows (Rs.) 01-Jan-21 (900,000 ) 31-Dec-21 0…

A: Cost of Capital 0.08 Date Cash flows (Rs.) 44197 -900000 44561 0 44926 240000 45291 320000…

Q: An investment has the following cash flows. Use the XIRR function to find the IRR. Date Cash Flow…

A: IRR It is utilized as it is helpful in analyzing the profit and which further helps in making a…

Q: Compute the rate of return represented by the cash flow. Year Cash Flow -$14,000 1 5,000 5,500 3…

A: Rate of return = IRR = that rate that makes the NPV as nil. We know that PV = FV/(1+r)^n Let the…

Q: Refer to the accompanying cash-flow diagram (see Figure), and solve for the unknown quantity in If G…

A: The question is based on the calculation of future value of an increasing gradient cash flows.

Q: · Given the following cash flows, determine the equivalent uniform cash flow at 9% interest. Draw…

A: Interest rate (r) = 9% We need to find the PV of cashflows first.

Q: 1. Use MS Excel to determine the Present Worth of the following cash-flow diagram: a) At 7%, PW = b)…

A: Present Value: The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: Compute the annual-equivalence amount for the following cash flow series ati = 10%:

A: The annual worth of an asset is teh annual equivalent cash flows an investment will generate…

Q: Determine the rate of return per year for the cash flow series shown below. Year Cash Flow, $…

A: Internal rate of return is one of the modern techniques of capital budgeting that take into…

Q: What is the IRR of the following set of cash flows? Year Cash Flow 0 - $61,300 1 18,900 2 64,500…

A: Internal rate of return is defined as the financial metric, which are basically used in financial…

Q: 2. Consider the following cash flow for an investment. Year Cash Flow Out Cash flow in -550 1 +300 3…

A: Given: Year Particulars Amount 0 Cash outflow -$550 1 Cash inflow $300 2 Cash inflow $0 3…

Q: ) For each of the following, determine the expected cash flows. Cash FlowEstimate…

A: Excel Spreadsheet: Excel Workings:

Q: What is the payback period for the following set of cash flows? (Round your answer to 2 decimal…

A: Payback Period: It is referred as the amount of time it takes to recover the cost of the…

Q: Calculate the internal rate of return (IRR) of the following cash flows: Year 0 1 2 3 4 5…

A: Solution: Computation of IRR Year Cash Flows IRR 0 -$1,650,000.00 12.38% 1 $330,000.00 2…

Q: Consider the following cash flows: Year Cash Flow -$6,600 1,900 3,900 1,700 1,400 What is the…

A: Year Cash flows Cumulative Cash flows 0 (6600) (6600) 1 1900 (4700) 2 3900 (800) 3 1700 900…

Q: For the arithmatic gradient of cash flow given below, if G= $550 , the value at year 23(V23) is:…

A: Value at year 23 = ? Interest Rate = 5% First Cash Flow = 1800 G = 550 N = 23

Q: Question 1 Based on the following information, display the calculation of cash conversion cycles for…

A: The cash conversion cycle indicates the number of days or periods it takes to convert its investment…

Q: Determine the rate of return per year for the cash flows shown below. Year 0 1 2 3 Cash…

A: Rate of return is the rate at which the present value of all the cash inflows and outflows becomes…

Q: What is the profitability index of an investment with cash flows in years 0 thru 4 of -340, 120,…

A: Profitability Index - It is obtained by dividing the present value of future cash inflows by the…

Q: From the following data, calculate internal rate of return (IRR) Year Cash Flow(Rs) 0 (3,84,000) 1…

A: Internal Rate of Return is the discounting rate where the net present value of the project is zero.

Q: Determine how many rate of (ROR) values the following cash flow series might have using the…

A: Number of ROR for an investment is based on the number of sign changes in the cash flows of…

Question

A manufacturer projects the cash flows shown below. Determine the rate of return if the cash flows occur as projected.

Year Cash Flow, $

0 -733,000

1 -467,000

2 215,000

3 279,000

4 – 8 309,000

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 As per the question

Step 2 Let Rate =8%

Step 3 Let rate 13%

Step 4 Solution

Step 5 Answer

Trending now

This is a popular solution!

Step by step

Solved in 5 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Assume San Lucas Corporation in MAD 26-1 assigns the following probabilities to the estimated annual net cash flows: a. Compute the expected value of the annual net cash flows. b. Determine the expected net present value of the equipment, assuming a desired rate of return of 10% and the expected annual net cash flows computed in part (a). Use the present value tables (Exhibits 2 and 5) provided in the chapter in determining your answer. c. Based on your results in parts (a) and (b), should San Lucas Corporation invest in the equipment?
Start with the partial model in the file Ch07 P25 Build a Model.xlsx on the textbook’s Web site. Selected data for the Derby Corporation are shown here. Use the data to answer the following questions. Calculate the estimated horizon value (i.e., the value of operations at the end of the forecast period immediately after the Year-4 free cash flow). Assume growth becomes constant after Year 3. Calculate the present value of the horizon value, the present value of the free cash flows, and the estimated Year-0 value of operations. Calculate the estimated Year-0 price per share of common equity.
Assume a company is going to make an investment in a machine of $825,000 and the following are the cash flows that two different products would bring. Which of the two options would you choose based on the payback method?
Consider the following cash flows: Year Cash flow 0 -25000 1 7000 2 6000 3 5000 4 3000 5 3000 6 1500 7 1500 8 500 Compute the rate of return represented by the cash flows.
Consider the following cash flows: Year Cash Flow 0 −$ 33,500 1 13,500 2 18,200 3 10,900 What is the IRR of the cash flows?
For the cash flows shown, determine: (a) the number of possible i* values (b) the i* value displayed by the IRR function (c) the external rate of return using the MIRR method if ii = 18% per year and ib = 10% per year. Year 0 1 2 3 4 Revenues, $ 0 25,000 19,000 4000 18,000 Costs, $ −6000 −30,000 −7000 −6000 −12,000
Consider the following cash flows: Year Cash Flow 0 –$ 32,500 1 14,300 2 17,400 3 11,700 What is the IRR of the cash flows? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
What is the IRR of the following set of cash flows? Year Cash Flow 0 –$9,531 1 4,200 2 5,500 3 4,400
For the cash flows shown and in preparation for a PW-based rate of return analysis, determine the incremental cash flow between machines B and Afor (a) year 0, (b) year 3, and (c) year 6.