If an investment has an estimated cost of £1000, and it offers £550 the first and the second year after the investment, the internal rate of return (IRR) of it is approximately O A. 6.6% O B. 4.5% OC. 3.7% O D.5.5%
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- Suppose $100 is invested today in a project that returns $330 in 6 years. Calculate the IRR of this investment.Consider three investment plans at an annual rate of 9.38%. • Investor A: Invest $2000 per year for the first 10 years of your career. At the end of 10 years, make no further investments, but reinvest the amount accumulated at the end of 10 years for the next 31 years. • Investor B: Do nothing for the first 10 years. Then start investing $2000 per year for the next 31 years. • Investor C: Invest $2000 per year for the entire 41 years. Note that all investments are made at the beginning of each year, the first deposit will be .made at the beginning of age 25 (n=0), and you want to calculate the balance at age of 65 (n=41).Kaneb is evaluating two alternative pipeline welders. Welder A costs $310,000, has a 7-year life, and is expected to generate net cash inflows of $78,000 in each of the 7 years. Welder B costs $320,000, has a 5-year life, and is expected to generate annual net cash inflows of $68,900 in each of the 5 years. Kaneb's cost of capital is 16%. Using the equivalent annual annuity method, which alternative should be chosen and what is its NPV?
- 10 An advertising campaign will cost $500,000 for planning and $50,000 in each of the next five years. It is expected to increase revenues permanently by $50,000 per year. Additional revenues will be gained in the pattern of an arithmetic gradient with $20,000 in the first year, declining by $4,000 per year to zero in the sixth year. Estimate the IRR of this investmentA company has issued 12-year bonds, with face value of 1,500,000 in 1,000 units. Interest at 16% is paid quarterly. If an investor desires to earn 22% nominal interest on 150,000 worth of these bonds, what would the selling price have to be? a.Php 122,387.456 b.Php 124,376.465 c.Php 112,222.044 d.Php 145,276.3547. after a lengthy meeting with the marketing team about a new product being introduced, your boss asks you to look into the project. the marketing team is estimating a 15 yer profit of $220,000 (annuity). That amount is expected to grow by an additional $25,000 (gradient) each year through year 5, level off at year five's amount through year 10, then decrease by $15,000 per year (decreasing gradient) through year 15. You determine that the initial cost of the production system will be $1,600,000. What is the PW of this project if the MARR is 25%? Enter your answer to the nearest whole dollar amount
- Amigo Mobility, which manufactures battery-powered mobility scooters, has $670,000 to invest. The company is considering three different battery projects that will yield the following rates of return: Deep cycle = 17%Wet/flooded = 49%Lithium ion = 19% The initial investment required for each project is $170,000, $100,000, and $400,000, respectively. If Amigo’s invests in all three projects, what will be its overall rate of return? The rate of return is __ %A firm reports that its IRR for each quarter is 1.09%. What is the equivalent annual effective rate of return for this firm expressed in percentage terms to 3 digits after the decimal point?As part of your inheritance, you received a bond that will pay interest of $700 every 6 months for 15 years. If the coupon rate is 7% per year, the face value of the bond is (a) $10,000 (b) $20,000 (c) $30,000 (d) $40,000
- Ten years ago, Johnson Recovery purchased a wrecker for $330, 000 to move disabled 18-wheelers. He received a salvage value of $25, 000 after 10 years of use. During this 10-year period, his average annual revenue totaled $60, 000. a) Did he recover his investment at 12% per year return? In other words, does the Annual Equivalent Value of the benefits exceed the Capital Recovery cost at an interest rate of 12%? b) Suppose Johnson moves, on average, 250 disabled 18-wheelers each year. What is his average equivalent benefit/cost per vehicle moved? c) Now, incorporate annual operating and maintenance costs into your analysis. If the annual O&M cost was $5, 000 the first year and increased by a constant 10% per year, what is the annual equivalent worth at 12% per year?A project has an initial cost of $65,000, expected net cash inflows of $11,000 per year for 12 years, and a cost of capital of 11%. What is the project's MIRR? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to two decimal places.Your friend made an investment of P 45,000.00 for 60 days at 15% simple interest. If withholding tax is 20%, what is the net interest that he will receive at the end of two months?