According to the information given in the table below, which of the following is cash flow from investing activities? 50000 Increase in building Decrease in machinery 60000 Decrease in land 22000 Decrease in LT investment 36000 Increase in prepaid expenses 19000
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- Consider the 4 investments shown. Which of these are simple investments? Net Cash Net Cash Net Cash Flow for Flow for Flow for Project B Project C Project D -38000 45000 -46300 32000 -18000 2500 32000 -18000 6459 -22000 -18000 78345 n Net Cash Flow for Project A 0-32000 1 30000 2 20000 3 10000 Project A Project B Project C Project DExercise 24-12 (Algo) Net present value, unequal cash flows, profitability index, and service company LO P3 Following is information on two alternative investments. Beachside Resort is considering building a new pool or spa. The company requires a 6% return from its investments. (PV of $1. FV of $1. PVA of $1. and EVA of $1) (Use oppropriate factor(s) from the tables provided.) Initial investment Net cash flows in: Reg A a. For each investment project compute the net present value. b. For each investment project compute the profitability index. c. If the company can only select one project, which should it choose on the basis of profitability index? Pool Year 1 Year 21 Year 3 Year 4 Year 5 Complete this question by entering your answers in the tabs below. Year 1 Year 2 Year 3 Year 4 Year 5 Totals Pool Spa $ (177,325) $ (159,960) Spa 49,000 46,000 74,295 82,400 72,000 Req B and C For each investment project compute the net present value. 26,000 46,000 68,000 73,000 29,000 Net Cash Flows…What is the rate of return for a capital investment project that will have the cash flows described in table below? Year 0 1-2 3-5 Cash flow -$10,500 2,000 4,000
- 2. Compute the IRR for the investment represented by the following cash flow table: Year 1 4 6. 7. Cash Flow -1200 +350 +300 +250 +200 +150 +100 +50 (in $1000's)According to the information given in the table below, which of the following is cash flow from investing activities? Increase in building 55000 Decrease in machinery 73000 Decrease in land 44000 Increase in LT investment 23000 Increase in prepaid insurance 19000 Select one: O a. 36000 O b. 32000 О с. 39000 O d. - 25000The “Logistics and Transportation Star” Ltd is considering its alternative investmentscomprising its investment opportunity set (Investment A - Investment Z). Theinvestments with their relevant cash flows are as follows:Year Investment A Investment B Investment C Investment D Investment E Investment Ζ0 -600,000,00 € -480,000.00 € -360,000.00 € -240,000.00 € -720,000.00 € -840,000.00 €1 168,000,00 € 120,000.00 € 180,000.00 € 48,000.00 € 240,000.00 € 300,000.00 €2 168,000,00 € 120,000.00 € 84,000.00 € 48,000.00 € 240,000.00 € 240,000.00 €3 180,000,00 € 180,000.00 € 84,000.00 € 84,000.00 € 240,000.00 € 240,000.00 €4 180,000,00 € 180,000.00 € 84,000.00 € 84,000.00 € 192,000.00 € 168,000.00 €5 190,000,00 € 190,000.00 € 94,000.00 € 94,000.00 € 190,000.00 € 178,000.00 € c. If Logistics and Transportation Star can invest up to 1,800,000€, which are theinvestments that it should prefer? Explain your recommendations. d. Rank the investments from the best to the worst according to the Simple…
- After-Tax Cash Flows Below is a list of aspects of various capital expenditure proposals that the capital budgeting team of Anchor, Inc., has incorporated into its net present value analyses during the past year. Unless otherwise noted, the items listed are unrelated to each other. All situations assume a 40% income tax rate and an 11% minimum desired rate of return. 1. Pre-tax savings of $4,000 in cash expenses will occur in each of the next three years. 2. A machine is purchased now for $37,000 cash. 3. A long-haul tractor costing $27,000 will be depreciated $9,000, $12,000, $4,050, and $1,950, respectively, on the tax return over four years. 4. Equipment costing $200,000 will be depreciated over five years on the tax return in the following amounts: $25,000; $50,000; $50,000; $50,000; and $25,000. 5. Pre-tax savings of $8,800 in cash expenses will occur in each of the next six years. 6. Pre-tax savings of $7,000 in cash expenses will occur in the first, third, and fifth years from…The “Logistics and Transportation Star” Ltd is considering its alternative investmentscomprising its investment opportunity set (Investment A - Investment Z). Theinvestments with their relevant cash flows are as follows:Year Investment A Investment B Investment C Investment D Investment E Investment Ζ0 -600,000,00 € -480,000.00 € -360,000.00 € -240,000.00 € -720,000.00 € -840,000.00 €1 168,000,00 € 120,000.00 € 180,000.00 € 48,000.00 € 240,000.00 € 300,000.00 €2 168,000,00 € 120,000.00 € 84,000.00 € 48,000.00 € 240,000.00 € 240,000.00 €3 180,000,00 € 180,000.00 € 84,000.00 € 84,000.00 € 240,000.00 € 240,000.00 €4 180,000,00 € 180,000.00 € 84,000.00 € 84,000.00 € 192,000.00 € 168,000.00 €5 190,000,00 € 190,000.00 € 94,000.00 € 94,000.00 € 190,000.00 € 178,000.00 € You are asked to evaluate the above investments and answer the following questionsassuming that the firm’s cost of capital is 10%.a. Rank the investments from the best to the worst according to their Net PresentValue (NPV) and…For each of the investments below, calculate the rate of return earned over the period. Cash Flow During Period - $900 14,000 5,000 70 1,500 (Click on the icon here in order to copy the contents of the data table above into a spreadsheet.) Investment A B C D E Beginning-of-Period End-of-Period Value Value $1,400 140,000 55,000 500 14,000 $400 115,000 49,000 200 12,600
- The management of Unter Corporation, an architectural design firm, is considering an investment with thefollowing cash flows:Year Investment Cash Inflow1 ......................... $15,000 $1,0002 ......................... $8,000 $2,0003 ......................... $2,5004 ......................... $4,0005 ......................... $5,0006 ......................... $6,0007 ......................... $5,0008 ......................... $4,0009 ......................... $3,00010 ......................... $2,000Required:1. Determine the payback period of the investment.2. Would the payback period be affected if the cash inflow in the last year were several timesas large?Determine the ERR (External rate of return) of the cash flows if external rate (e) is given as %18. Cash Flow Year 0 1 2 3 4 5 6 Select one: a.0.3073 b.0.2988 c.0.2565 d.0.2638 e.0.3491 f.0.2783 -3000 2000 4000 -1000 3000 4000 -5000 9000A3 4a. We have two mutually exclusive investments with the following cash flows: Year Investment A Investment B 0 –$100 –$100 1 10 50 2 30 40 3 50 30 4 70 20 a. Using a financial calculator, calculate the IRR for each of the investments. State your answers in percentages rounded to two decimal places.