&takeAssignmentSessionLocator=D&inpro... to ... Determine the average rate of return for a project that is estimated to yield total income of $250,000 over 4 years, costs $480,000, and has a $20,000 residual value. %
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- Start with the partial model in the file Ch10 P23 Build a Model.xlsx on the textbooks Web site. Gardial Fisheries is considering two mutually exclusive investments. The projects expected net cash flows are as follows: a. If each projects cost of capital is 12%, which project should be selected? If the cost of capital is 18%, what project is the proper choice? b. Construct NPV profiles for Projects A and B. c. What is each projects IRR? d. What is the crossover rate, and what is its significance? e. What is each projects MIRR at a cost of capital of 12%? At r = 18%? (Hint: Consider Period 7 as the end of Project Bs life.) f. What is the regular payback period for these two projects? g. At a cost of capital of 12%, what is the discounted payback period for these two projects? h. What is the profitability index for each project if the cost of capital is 12%?4 You are considering the following investment activity. The facts are the following: Required investment 300,000.00 Discount Rate 9% Life of project 7.00 Years Net income for the project Sales 140,000.00 Expenses Material 25,000.00 Labor 35,000.00 Overhead 15,000.00 Total Expenses 75,000.00 Net Income 65,000.00 What is the NPV of this investment? What is the IRR of this investment? Would you fund this project? Show your work below Year 0 1 2 3 4 5 6 7b) Find the IRR of the following projects and make your decision. Assume that the projects' cost of capital (or WACC) is 5%.Project X that costs $800 million is expected to generate $60m per year for 18 years. Is this project acceptable?Project Y that costs $100 million is expected to generate $22m per year for 7 years. Is this project acceptable? DO NOT SHOW ME ANSWER IN EXCEL FORM. I NEED STEPS TYPED OUT ON HOW TO SOLVE. ALREADY SUBMITTED THIS QUESTION ONCE TODAY.
- Compute the payback period (PB), net present value (NPV), internal rate of return (IRR), profitability index (PI) and excess of IRR over k. Assume k at 10%. Due tonight at 9 pm. Decide on which Project will you choose and why? Project X (Videotapes of the Weather Report) ($10,000 investment) Project Y (Slow-Motion Replays of Commercials) ($30,000 investment) Year Cash Flow Year Cash Flow 1 $5,000 1 $15,000 2 3,000 8,000 ........ 3 4,000 9,000 4 3,600 4 11,000 ..a) Find the PP and NPV of the following projects. Assume that the projects' cost of capital (or WACC) is 8%.Project A that costs $200 million is expected to generate $50m in year 1, $80m in year 2, and $100m in year 3. Project B that costs $500 million is expected to generate $85 per year for 10 years. DO NOT SHOW ME ANSWER AND STEPS IN EXCEL FORM. I NEED STEPS TYPED OUT. THX. ( I have already submitted this question once today.)NOTE: Provide a format and show your work (example: N = 6, PV = XXX, I = X%, etc.) 1. As the project manager at Jelz, Inc., you are considering a project that will cost $4,276 and produce cash flows of $1,050 in year 1, $1,250 in year 2, $1,250 in year 3, and $1,550 in year 4. Find the rate of return for the project and determine if you should take the project if your required rate of return is 7.15%. (This is a 2 part question, make sure you answer both parts. Numerical answers should be rounded to 2 decimal places.) 2. You are looking to buy a car. You can afford $550 in monthly payments for five years. In addition to the loan, you can make a $6,000 down payment. If interest rates are 7.25 percent APR, what price of car can you afford (loan plus down payment)? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
- How much would you invest today in order to receive $30,000 in each of the following? (for further instructions on present value in Excel, see the Suggested Resources in the textbook: https://cnx.org/contents/kg0cimBs@14.13:bDQCmuJO@6/Suggested-Resources) a. 10 years at 9% b. 8 years at 12% c. 14 years at 15% d. 19 years at 18%I am seeking advice for the 2nd part of this question, I Put a #2 by the questions. Thank you Connor Corporation is considering two projects (see below). For your analysis, assume these projects are mutually exclusive with a required rate of return of 10%. Project 1 Project 2 Initial investment $(465,000) $(700,000) Cash inflow Year 1 $510,000 $850,000 Compute the following for each project: NPV (net present value) PI (profitability index) IRR (internal rate of return) 2nd part of question : Based on your analysis, answer the following questions : Which is the best choice? Why? Which project should be selected and why? If the projects had the same IRR amounts but different NPV totals, then how would you know which project to select? Explain. What would happen if both projects had negative NPV totals? Which project would you choose? What do negative NPVs indicate? Explain. Should we also use the payback method to assist us in project…Q6) IBM networks want to modernize their networking system. Proposals have been received from two major software companies. The first proposal cost $6million but will raise the firm’s annual cash flows by $3million. The second proposal cost $7million and provides cash flow of $3.5million a year. Both projects have a life span of 3 years. Assuming that the cost of capital is 8%, which proposal may be recommended on the basis of Net Present Value criteria. Select one: a. Project B, NPV 1731290 b. Project A, NPV 20198 c. Project B, NPV 2019839 d. Project A, NPV 2019839
- Use Excel’s NPV function for this problem. Riverside Inc. has an 8% cost of capital. The firm has an investment opportunity that costs $1,000. Riverside expects the investment to generate annual cash inflows $360 for each of the next three years. The net present value of the project (rounded to the nearest dollar) is Select one: a. $80. b. $72. c. ($72). d. ($80). Use Excel’s IRR function for this problem. Rancho Cucamonga has a 6% cost of capital. The firm has an investment opportunity that costs $2,000. Riverside expects the investment to generate annual cash inflows $600 for each of the next four years. The internal rate of return and Rancho’s decision are Select one: a. 7.7% and don’t invest in the project. b. 1.7% and don’t invest in the project. c. 1.7% and invest in the project. d. 7.7% and invest in the project. Whitelands Inc. bought equipment for $150. Whitelands estimated that the equipment would last ten years and used the double-declining balance method to depreciate it.…Use the data below for problems 6 to 10. YearProj YProj Z 0($420,000)($420,000) 1400,000182,000 2185,000156,000 3—146,000 4—175,000 The projects provide a necessary service, so whichever one is selected is expected to be repeated into the foreseeable future. Both projects have an 11% cost of capital. 6. What is each project’s initial NPV without replication? 7. What is each project’s equivalent annual annuity? 8. Now apply the replacement chain approach to determine the shorter projects’ extended NPV. Which project should be chosen? 9. Now assume that the cost to replicate Project Y in 2 years will increase to $600,000 because of inflationary pressures. How should the analysis be handled now, and which project should be chosen?XY Company is considering 5 investment projects as follows: Project Investment ($) Profitability index (PI) A 10,000 1.2 B 6,000 1.1 C 18,000 1.6 D 14,000 0.9 E 12,000 1.3 The company has $30,000 available for investment. Projects C and E are mutually exclusive. All projects can be undertaken only once and are not divisible. Required: (iii)Calculate the maximum NPV earned from the projects to be picked.
