A project cost $160 dollars today and has expected cash flows of $100 per year forever, beginning one year from today. What is the project's payback and discounted payback periods if the discount rate is 22%?
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- I want you to provide me the Cash Flow diagram of the problem. Only cash flow diagram, the solution is already there. Thanks in advance! The annual estimated cash flow is $140,000. The salvage value will be 12% of the initial price after 5 years. The discount rate (r) is 18% Let us assume the initial price of the doughnut machine be X. PV of cash inflows=PV of cash outflows$140,000×PVAF4,18%+.12X×PVF5,18%=X$140,000×2.69006180465+.12X×0.43710921621=X$376,608.652651=X-0.05245310594$376,608.652651=0.94754689406XX=$397,456.479475 The maximum purchase price of the doughnut machine is $397,456.48.(Need answer ASAP) A man decided to Invest in an equipment worth PHP 12,000,000.00 capital with the following data: Expected revenue - PHP 5.8M/year Cost of Operation and Maintenance - PHP2.4/year Taxes and Insurance. - 2% of the first cost/year Expected earnings is 12% minimum Life of the equipment is 5 years with expected value of PHP1.2M after 5 years a. Determine the desirable investment using ROR method and AW method b. What are the ways and means to make it desirable investment c. In what case we should use the present worth and future worth method of economy study?dont use excel i will 5 upvotes. Assuming a firm’s weighted average cost of capital is 12%, what is the discounted payback period of the following project? Year Net Cash Flow 0 -$375,000 1 $200,000 2 $200,000 3 $350,000 Group of answer choices a. 2.40 years b. 2.15 years c. 2.21 years d. 1.88 years
- A man is considering putting up his own enterprise, where an investment of 800,000Php will be required and will take 15 years to recoup . He estimates his annual sales at 800,000Php along with the following operating costs. Materials ............................. 160,000Php/ yearLabor ............................. 280,000Php/ yearOverhead ............................. (40,000 + 10% of sales) Php/ yearSelling Expense............................. 60,000Php/ yearThe man will give up his regular job paying 216,000 Php per year and devote all his time to the operation of his business, this will result in decreasing his labor cost by 40,000Php per year, material cost by 28,000Php per year and overhead cost by 32,000 Php per year. If the man expects to earn at least 20% of his capital, should he invest? solve in the present worth cost methodA. Project A has a net present value of zero when the discount factor of 20% is used. How much return is the project earning?B. If project A above is earning K150, 000 per year in perpetuity, what is the initial investment cost of the project? C. Company A expects to generate K150, 000 cash flows per year in perpetuity and the risk adjusted discount rate is 20%. What should be the certainty equivalent cash flows when the risk free rate is 10%Consider a proposed project that has the following costs and benefits. Using linear interpolation, what is the project's simple or conventional payback period? Year Costs Benefits 0 $4,000 1 2,000 2 $1,500 3 1,500 4 1,500 5 2,300 6 2,300 A. 6.58 years B. 4.65 years C. 3.98 years D. 5.41 years
- You are considering an open-pit mining operation. The cash flow pattern issomewhat unusual since you must invest in some mining equipment, conductoperations for two years, and then restore the sites to their original condition.You estimate the net cash flows to be as follows: N Cash flow 0 -$1,600,0001 1,500,0002 1,500,0003 -700,000 What is the approximate rate of return of this investment?(a) 25%(b)38%(c) 42%(d)62%An investment project costs $100,000. ll is expected to have an annual net cash flow of $40,000 for 5 years. What is the project's payback period?(a) 2.5 years(b) 3.5 year(c) 4.5 years(d) 5 yearsAssuming monetary benefits of an information system at $85,000 per year, one-time costs of $75,000, recurring costs of $35,000 per year, a discount rate of 12 percent, and a 5-year time horizon, calculate the net present value (NPV) of the system’s costs and benefits. Also calculate the overall return on investment (ROI) of the project and then present a break-even analysis (BEA). At what point does break-even occur?
- Your company is considering the introduction ofa new product line. The initial investment required forthis project is $500,000, and annual maintenance costsare anticipated to be $45,000. Annual operating costswill be directly proportional to the level of productionat $8.50 per unit, and each unit of product can be soldfor $65. If the MARR is 15% and the project has a life of5 years, what is the minimum annual production levelfor which the project is economically viable? With Cash Flow Thank YouMargaret has a project with a £ 28,000 first cost that returns £ 5,000 per year over its 10-year life. It has salvage value of £ 2,900 at the end of 10 years. If the MARR is 11 %, (Use 5 significant figures for your calculations, and round your answers to the nearest dollar. Indicate losses as a negative value.) (a) What is the present worth of this project? (b) What is the annual worth of this project? (c) What is the future worth of this project after 10 years?1 - Assuming an interest rate of 3% per year (effective), calculate the feasibility of each option. You can use either Present Worth Analysis or Equivalent Uniform Worth Analysis. In this part, your calculation should be done without the use of Excel. Show your equations and the results. 2 - Using linear interpolation, calculate the rate of return for each option. Here, your calculation should be implemented using Excel. 3 - Assuming that the initial equipment can be depreciated over the course of 20 years and usingDouble Decline Balance Depreciation, calculate the depreciation schedule for the equipment. 4- Assume a state income tax of 5%. Calculate the after-tax cashflow for each option assuming the depreciation used. Use only the depreciation on question 2.