For each of the following projects calculate: i. Payback period ii. Net present value when required rate of return is 10% .
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4. The following information was extracted from the books of ABC Ltd that required to invest in any of the following investment projects that had the following
Year Project A (sh.) Project B (sh.)
0 (300,000) (300,000)
1 150,000 200,000
2 220,000 280,000
3 100,000 50,000
4 50,000 350,000
Required:
For each of the following projects calculate:
i. Payback period
ii.
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- AFN EQUATION Refer to Problem 16-1. What additional funds would be needed if the companys year-end 2019 assets had been 4 million? Assume that all other numbers are the same. Why is this AFN different from the one you found in Problem 16-1? Is the companys capital intensity the same or different? Explain.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?The following cash flows have been identified by Company A for a potential capital investment project: Time 0 Time 1 Time 2 Cash flow amount (€250,000) €240,000 €160,000 The company's cost of capital is 9%. What is the NPV of this project? €96,350 €104,800 €150,000 €604,800
- 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 yearsSunshine Corporation is reviewing an investment proposal. The initial cost of the investment is R52 500. The estimated cash flows and net profit for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. Year Net cash flows Net profit1 R20 000 R2 5002 R17 500 R3 5003 R15 000 R4 5004 R12 500 R5 5005 R10 000 R6 500 The cost of capital is 12%.Required:Calculate the following:1. Payback Period 2. Net Present value 3. Accounting rate of returnThe following project has cash flows as follows: Year Project A 0 -$705,000 1 $225,000 2 $421,500 3 $275,000 What is the IRR?
- Please show calcualtons, (Excel or long hand): 13) Develop a cash flow worksheet based on the following information, initial investment = 500,000, 5-year property, variable costs = 54%, fixed costs 70,000 per year, sales yr 1 = 300,000 yr 2 = 500,000, yr 3 = 750,000, yr 4 = 550,000, yr 5 = 250,000 tax rate = 21%White Company can invest in one of two projects, TD1 or TD2. Each project requires an initial investment of $101,250 and produces the year-end cash inflows shown in the following table.The following are the cash flows of two independent projects: Year Project A Project B 0 $ (400 ) $ (400 ) 1 230 300 2 230 300 3 230 300 4 230 a. If the opportunity cost of capital is 10%, calculate the NPV for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
- After paying GH¢ 30,000 for an initial investigation on projects assessments, the finance department of Finger Foods Plc provided the following end-of-year cash flows for the investment projects. Project Initial T0 Outlay ¢000 T1 ¢000 T2 ¢000 T3 ¢000 T4 ¢000 Abo (A) (1,500) (500) 1,200 600 300 Baa (B) (2,000) (1,000) 2,500 2,500 2,500 Cal (C) (1,750) 500 1,100 1,400 1,000 Dok (D) (2,500) 700 900 1,300 300 Eak (E) (1,600) (500) 200 2,800 2,300 You have just been promoted from the position of a Finance Officer to the new rank of A financial Analyst after your MBA programme. As a result, the managing director has written a memorandum to you with the cash flows from the various projects, as shown above, to appraise the projects and advise management on the best decision the company can take to maximize the company's value. The company's cost of capital is 15% and its corporation tax is 30%.…After paying GH¢ 30,000 for an initial investigation on projects assessments, the finance department of Finger Foods Plc provided the following end-of-year cash flows for the investment projects. Project Initial T0 Outlay ¢000 T1 ¢000 T2 ¢000 T3 ¢000 T4 ¢000 Abo (A) (1,500) (500) 1,200 600 300 Baa (B) (2,000) (1,000) 2,500 2,500 2,500 Cal (C) (1,750) 500 1,100 1,400 1,000 Dok (D) (2,500) 700 900 1,300 300 Eak (E) (1,600) (500) 200 2,800 2,300 You have just been promoted from the position of a Finance Officer to the new rank of A financial Analyst after your MBA programme. As a result, the managing director has written a memorandum to you with the cash flows from the various projects, as shown above, to appraise the projects and advise management on the best decision the company can take to maximize the company's value. The company's cost of capital is 15% and its corporation tax is 30%.…Following is information on two alternative investments being considered by Tiger Co. The company requires a 8% return from its investments. Project X1 Project X2 Initial investment $ (128,000 ) $ (216,000 ) Expected net cash flows in: Year 1 49,000 96,000 Year 2 59,500 86,000 Year 3 84,500 76,000
