If B.E.P=$200 in Project C rapidly becomes $500; but the Revenues is fixed at $600 then expected Profit in this Project is being close to a risk.
Q: Maxwell Feed & Seed is considering a project that has the following cash flow data. What is the…
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Q: What is the project's NPV? Note that a project's projected NPV can be negative
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A: The provided information are: Expected net present value = $50000 Standard deviation of net present…
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A: NPV helps to identify the projects that will add value to the organization.
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A: Net Present Value is defined as the difference between the cash flows of the present value and cash…
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A: IRR is the rate of return at which the present value of cash inflows equal the project cost
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A: Data given: Year Cash Flow ($) 0 -1000 1 230 2 255 3 280 4 305 WACC =14.50%…
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A: The project X might be selected comparing to the project Y.
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A: NPV is the present value of cash flows
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Q: urns from a project are normally distributed with a mean of OMR 225,000 and a standard deviation of…
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A: The expected value is that value which has the chances of getting received at the end of the period.
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Q: C: 9% Year Cash flows -$1,000 $500 $500 $500
A: Year Cash flow 0 -1000 1 500 2 500 3 500 WACC = 9%
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A: Let CFn be the cashflow in year n. Cost of capital = 10% Let r = IRR
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A: Given: Year Cashflows ($) 0 -1000 1 425 2 425 3 425
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Q: roject you are considering is expected to provide benefits worth $225,000 in one year. If the…
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Q: True or False Assume that the riskfree rate of return is 5% p.a. and that an investment project…
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A: Internal rate of return is interest rate at which net present value is zero.
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Solved in 3 steps
- The Sloan Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow(I) Cash Flow(II) 0 –$ 55,000 –$ 18,900 1 25,000 10,150 2 25,000 10,150 3 25,000 10,150 a-1 If the required return is 10 percent, what is the profitability index for both projects? (Do not round intermediate calculations. Round your answers to 3 decimal places, e.g., 32.161.) a-2 If the company applies the profitability index decision rule, which project should the firm accept? Project I Project Il b-1 What is the NPV for both projects? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b-2 If the company applies the NPV decision rule, which project should it take? Project I Project II4. We only have OMR 800,000 to invest. Which do we select based on Weighted average profitability index method ? Project NPV Investment PI A 430,000 500,000 B 241,250 225,000 C 394,250 375,000 D 262,000 575,000Subject: Logistic management calculate EVA and suggest favorable or not ? Investment 1 mioSales 500,000All Expenses 400,000Market opportunity cost 15%
- A company is thinking of investing in one of two potential new products for sale. The projections are as follows: Year Revenue/cost £ (Product A) Revenue/cost £ (Product B)0 (150,000) outlay (150,000) outlay 1 24,000 12,0002 24,000 25,3333 44,000 52,0004 84,000 63,333 Calculate the IRR for Product B only using 3% and 15% to 2 d.p.The Weiland Computer Corporation is trying to choose between the following mutually exclusive design projects, P1 and P2:Year 0123 Cash flows (P1) -$53,000 27,000 27,000 27,000 Cash flow (P2) -$16,000 9,100 9,100 9,100a. If the discount rate is 10 percent and the company applies the profitability index (PI) decision rule, which project should the firm accept?b. If the firm applies the Net Present Value (NPV) decision rule, which project should it take?c. Are your answers in (a) and (b) different? Explain why?Y2 Aportfolio manager states that the return for the period is 5.34 per cent by using the following annual rates of returm Year. Return 1. 6% 2 -37% 3. 27% What type of rate of return (HPR AM or GM) said by the manager and why?
- Consider the investment project with net cash flows shown. There are 2 rates of return for the project. One is 43.47%. What is the other? Enter as a percentage without the percent sign. For instance, if your answer is 10.23%, enter as 10.23. n Net Cash Flow 0 -$8000 1 $10000 2 $30000 3 -$40000The Weiland Computer Corporation is trying to choose between the following mutually exclusive design projects, P1 and P2: Year 0 1 2 3 Cash flows (P1) -$53,000 27,000 27,000 27,000 Cash flow (P2) -$16,000 9,100 9,100 9,100 If the discount rate is 10 percent and the company applies the profitability index (PI) decision rule, which project should the firm accept? If the firm applies the Net Present Value (NPV) decision rule, which project should it take? Are your answers in (a) and (b) different? Explain why?A company is thinking of investing in one of two potential new products for sale. The projections are as follows: Year Revenue/cost £ (Product A) Revenue/cost £ (Product B)0 (150,000) outlay (150,000) outlay 1 24,000 12,0002 24,000 25,3333 44,000 52,0004 84,000 63,333 Calculate NPV of both products (to 1 d.p.) assuming a discount rate of 7%. Which product should be chosen and why?
- A project costs $1 million and has a base-case NPV of exactly zero (NPV = 0). (A negative answer should be indicated by a minus sign. Enter your answers in dollars, not millions of dollars.) a. If the firm invests, it has to raise $670,000 by a stock issue. Issue costs are 19.25% of net proceeds. What is the project’s APV? b. If the firm invests, there are no issue costs, but its debt capacity increases by $670,000. The present value of interest tax shields on this debt is $93,000. What is the project’s APV?Consider the following cash flows: Year 0 1 2 3 4 5 6 Cash Flow -$9,000 $2,000 $3,600 $2,700 $2,100 $2,100 $1,600 C. IRR. Calculate the IRR for this project. The company’s required rate of return is 10%. Should it be accepted or rejected? D. NPV. Using a 10% required rate of return, calculate the NPV for this project. Should it be accepted or rejected? E. PI. Calculate the Profitability Index (PI) for this project. Should it be accepted or rejected?Based on the information below which projects will we choose based on weighted average profitabiltity Index if we only have OMR500,000 to invest? Project NPV Investment PI A 130,000 200,000 B 241,250 225,000 C 294,250 275,000 D 262,000 250,000 Select one: a. WAPI AD b. WAPI AB c. WAPI BD d. WAPI BC