Q: what is the discounted payback period for the investment?
A: Payback Period is the calculation of periods or years within which cost of investment is recovered.…
Q: what is apr? do we use APR or EAR when we are calculating the present value of investment? is APR…
A: The term APR stands for Annual percentage rate. It reflects the amount of simple interest being owed…
Q: How much is BBM investment
A: This is a partnership - admission of a partner question, where the new partner is admitted with…
Q: what would be the purchasing power of the total return on their investment
A: Purchasing Power: Purchasing power refers to the actual power of buying the goods of services with…
Q: e average rate of return on investment,
A: Average rate of return of investment = Average net income * 100/(Initial investment-Salvage value)
Q: How many of the following investment criteria always use all of a project's cash flows in their…
A: Capital budgeting techniques are used to determine whether the projects undertaken are profitable to…
Q: What is the present value index for Project A?
A: Present Value Index: It represents the ratio of the project's net present value to the initial cost…
Q: . VWhat is your rate of return on this investment? *
A: "Since you have posted multiple questions, we will solve first question for you. If you want any…
Q: /hat is the internal rate of return of the proposed project?
A: IRR(INTERNA RATE OF RETURN), is the rate that equates the present value of cash flows and the future…
Q: Discuss the advantages and disadvantages of using (a) payback, (b) net present value and (c )…
A: Payback Period: It refers to the period in which the project's or investment's initial cost is…
Q: What do you know about the mathematical value of the internal rate of return of a project under each…
A: Internal rate of return(IRR) is rate at which net present value(NPV) of project is equal to zero or…
Q: What is the significance of finding the internal rate of return?
A: IRR helps to check the viability of the project. If IRR is more than Kc than Project seems to be…
Q: r expected return on this investment?
A: Expected return on investment refers to the rate of return that an investor is expecting on an…
Q: Which alternative offers you the highest effective rate of return?
A: Investment appraisal is the method of evaluating and selecting investments from various investment…
Q: What is the required rate of return on the project? (De
A: Capital Asset Pricing Model (CAPM) is a measure used for the measurement of systematic risk. It…
Q: Describe the affects of the present value of an investment.
A: Present value of the investment: Present value of the investment is calculated using the cash flows…
Q: Define Expected rate of return
A: Introduction: Usually return is a kind of profit that comes from your investment. Example, an amount…
Q: Determine the ending value of the investment. Rate of return = 10%
A: We will assume that the rate of return mentioned in the question is for the end of the period. it…
Q: Consider IRR on Incremental Investment when Initial IRR Flows are equal?
A: Answer: IRR is a measure in capital budgeting used to measure the value of the predicted…
Q: An NPV analysis is one part of a complete captial investment analysis. What is the second part that…
A: Introduction: An analysis of capital investment is the mechanism by which management prepares,…
Q: Describe IRR on Incremental Investmentment When InitialFlows are equal?
A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…
Q: What do we mean by internal rate of return (IRR)?
A: Internal rate of return : Internal rate of return is one of the techniques used in capital budgeting…
Q: One must know the discount rate of an investment project to compute its: NPV, IRR, PI and payback…
A: The various tools employed in capital budgeting are Net present value (NPV), Profitability Index…
Q: What is a minimum attractive rate of return (MARR)?
A: Definition: Minimum Attractive Rate of Return (MARR): It is the minimum rate of return on the basis…
Q: Explain real rate of return
A: This is the raw rate of return adjusted with inflation. It is used to ascertain the effective return…
Q: Which of the following methods does not consider the investment’s profitability? ARR Payback NPV…
A: Average rate of return (ARR) and Internal rate of return (IRR) are methods of computing rate of…
Q: . What is the internal rate of return for this investment?
A: Internal rate of return: it is that percentage of compound annual return that an investor or company…
Q: Define real rate of return.
A: Real Rate of Return is defined as the rate that has been adjusted for rise in prices of commodities.…
Q: What is the estimated Internal Rate of Return (IRR) of the project? Should the project be accepted…
A: Calculate the initial investment and operating cash flow for the given investment: Excel formula:
Q: How can I calculate the NPV of an investment?
A: Net present value:- Net present value is the investment evaluation technique, where we evaluate…
Q: Explain expected rate of return
A: Return: Return is defined as the money attained or lost on an investment through certain time…
Q: what is the NPV of this investment?
A: Net Present Value: It is the value generated by the firm for taking on a project. It is calculated…
Q: Calculating the rate of return on investment.
A: Rate of return means the return expected from an investment. It is the return or income generated…
Q: what is the difference between a required rate of return and an expected rate of return?
A: Rate of return (ROR) is a value at which an investor earns additional amount on invested amount…
Q: How to determine the initial investment if I have the flows, of the npv and the irr
A: IRR is the rate at which NPV becomes zero.
Q: Is it okay to solve the payback period using the initial investment divided by the after-tax…
A: In the capital budgeting analysis, the payback period is an important method to determine the…
Q: Which provides a better estimate of a project’s “true” rate of return, the MIRR or theregular IRR?…
A: Internal rate of return (IRR): The internal rate of return (IRR) is a measure utilized in capital…
Q: What is the typical discount rate used with the Net Present Value (NPC) when project risk is the…
A: The net present value (NPV) is the discounted value of benefits less the initial costs. The values…
Q: The payback period for the investment would be: (Ro
A: Capital budgeting: capital budgeting is a decision-making method done by management accountants in…
Q: nually. Investors required rate of return is ce
A: Coupon rate =8.47% T=7 Face value=50,000 Price=45,000 Yield to maturity = C +(face value…
Q: Describe the concept of rate of return based on the return on invested capital in terms of a…
A: The term ROIC is used to calculate the profitability or return on invested capital that a business…
Q: What is the project's internal rate of return?
A: Answer has been given in the next sheet.
Can I calculate the
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- Net present value method, internal rate of return method, and analysis for a service company The management of Advanced Alternative Power Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows: The wind turbines require an investment of 887,600, while the biofuel equipment requires an investment of 911,100. No residual value is expected from either project. Instructions 1. Compute the following for each project: A. The net present value. Use a rate of 6% and the present value of an annuity table appearing in Exhibit 5 of this chapter. B. A present value index. (Round to two decimal places.) 2. Determine the internal rate of return for each project by (A) computing a present value factor for an annuity of 1 and (B) using the present value of an annuity of 1 table appearing in Exhibit 5 of this chapter. 3. What advantage does the internal rate of return method have over the net present value method in comparing projects?Net present value method, present value index, and analysis for a service company First United Bank Inc. is evaluating three capital investment projects by using the net present value method. Relevant data related to the projects are summarized as follows: Instructions 1. Assuming that the desired rate of return is 15%, prepare a net present value analysis for each project. Use the present value table appearing in Exhibit 2 of this chapter. 2. Determine a present value index for each project. (Round to two decimal places.) 3. Which project offers the largest amount of present value per dollar of investment? Explain.METHODS THAT CONSIDER TIME VALUE OF MONEY Two investment proposals have been made and the following data thereon are given: Project ALPHA Project BETA Investment P123,417 P155,934 Depreciable assets included in the investment figure 60,000 72,000 Economic life 8 years 12 years Annual sales revenue P65,000 P78,000 Annual out-of-pocket operating cost 36,000 42,500 Income tax rate 35% Cost of capital 10% Determine which proposal is the better one based on: a. Internal rate of return b. Net present value c. Profitability index d. Discounted payback period
- A company is evaluating three possible investments. The following information is provided by the company: Project A Project B Project C Investment $238,000 $54,000 $238,000 Residual value 0 30,000 40,000 Net cash inflows: Year 1 70,000 30,000 100,000 Year 2 70,000 21,000 70,000 Year 3 70,000 17,000 80,000 Year 4 70,000 14,000 40,000 Year 5 70,000 0 0 What is the payback period for Project A? (Assume that the company uses the straight−line depreciation method.) (Round your answer to two decimal places.) A. 1.8 years B. 2.4 years C. 5.00 years D. 3.4 yearsFollowing is information on two alternative investment projects being considered by Tiger Company. The company requires an 8% return from its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Project X1 Project X2 Initial investment $ (108,000) $ (176,000) Net cash flows in: Year 1 39,000 81,000 Year 2 49,500 71,000 Year 3 74,500 61,000 a. Compute each project’s net present value.b. Compute each project’s profitability index.c. If the company can choose only one project, which should it choose on the basis of profitability index?A project requires an initial investment of $500,000. The following cash flows have beenestimated for the life of the project:Year Cash flow ($)1 120,0002 150,0003 180,0004 160,000 a. The company uses NPV to appraise projects. Using a discount rate of 7%, calculate the NPVof the project and recommend whether the project should be undertaken.
- Consider the following financial data for an investment project:• Required capital investment al n = 0: $ 100,000• Project service life: I 0 yea rs• Salvage value at N = I 0: $15,000• Annual revenue: $150.000• Annual O&M costs (not including depreciation): $50.000• Depreciation method for tax purpose: seven-year MACRS• Income tax rate: 40%.Determine the project cash flow at the end of year lO.(a) $69.000(b) $73.000(c) $66.000(d) $67.000Question Content Area Net present value method, internal rate of return method, and analysis for a service company The management of Advanced Alternative Power Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows: Year Wind Turbines Biofuel Equipment 1 $400,000 $840,000 2 400,000 840,000 3 400,000 840,000 4 400,000 840,000 The wind turbines require an investment of $1,035,600, while the biofuel equipment requires an investment of $2,398,200. No residual value is expected from either project. Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Required: 1a. Compute the net present value for each…Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 5% return from its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Project X1 Project X2 Initial investment $ (102,000) $ (164,000) Net cash flows in: Year 1 36,000 76,500 Year 2 46,500 66,500 Year 3 71,500 56,500 a. Compute each project’s net present value.b. Compute each project’s profitability index.c. If the company can choose only one project, which should it choose on the basis of profitability index? Please answer "C" as well. I wasn't able to include that in the images