Investment Plan Annual Return Rate 6.00000% Investment Duration in Years 25 Desired Future Value $ 1,550,000 Present Value to Invest Explanation with formula only
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| Investment Plan | |
| Annual Return Rate | 6.00000% |
| Investment Duration in Years | 25 |
| Desired |
$ 1,550,000 |
| Present Value to Invest |
Explanation with formula only
Step by step
Solved in 3 steps
- Investment End of Year A B C 1 $ 13,000 $ 18,000 2 13,000 3 13,000 4 13,000 5 13,000 $ 13,000 6 13,000 54,000 7 13,000 8 13,000 9 13,000 10 13,000 18,000 Assuming an annual discount rate of 23 percent, find the present value of each investment. a. What is the present value of investment A at an annual discount rate of 23 percent? b. What is the present value of investment B at an annual discount rate of 23 percent? c. What is the present value of investment C at an annual discount rate of 23 percent?Problem 2 ABM Enterprise would like to evaluate/analyze an investment proposal.Given the following:Investment amount - 450,000 (2022)Dividends / Revenue stream - 100,000 for the first year and an interval of 5,000 for thesucceeding yearsDiscount rate - 14% a. NPV for the perio 2023 through 2029;b. Total NPV using manual computation;c. Total NPV using the Excel function; andd. IRR rate.Accounting M11-8 (Algo) Calculating Net Present Value, Predicting Internal Rate of Return [LO 11-3, 11-4] Vaughn Company has the following information about a potential capital investment: $ 310,000 $ 75,000 7 years 14% Initial investment Annual cash inflow Expected life Cost of capital Required: 1. Calculate the net present value of this project. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. Round the final answer to nearest whole dollar. Net Present Value
- An initial investment of $ 25000 in a business guarantees the following cash flows:Year Cash Flow3 8, 0004 10, 0006 14, 000Assume an interest rate of 5% compounded annually. Find the net present value of thecash flows.Cash flow End of year Amount Appropriate required return 1 0 2 0 3 0 4 to 15 0 4% 16 120000 a) Find the value of the bellow bond in order to assist ne with the investment decisionCalculate the internal rates of return of the following investment: Net investment -$1,100 Year 0 Net cash flows +6,500 Year 1 -11,400 Year 2 +6,000 Year 3 Round your answers to the nearest whole number and enter them in ascending order. IRR1: 0% IRR2: % IRR3: %
- Fixed capital investment 320 000 € working capital 35 000 € scrap value 30 000 € for the project with 6 years of service life and net cash flow given in the table, a) Calculate average rate of return (relative to NNA) b) Calculate net payback period c) Calculate net present value (r = 0.17) d) Calculate the discount rate (r *) that makes the net present value zero. *NCF: Net Cash Flow Year 1 2 3 4 5 6 NCF (€) 120000 130000 150000 170000 155000 140000Payback Period and Accounting Rate of Return: Equal Annual Operating Cash Flows without DisinvestmentJuliana is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $45,000 Net cash inflows from operations (per year for 10 years) 5,000 Disinvestment 0 For parts b. and c., round answers to three decimal places, if applicable. a. Determine the payback period. Answer years b. Determine the accounting rate of return on initial investment. Answer c. Determine the accounting rate of return on average investment. AnswerCash fllow End of year Amount Appropriate required return 1 0 2 0 3 0 4 to 15 0 4% 16 120000 a) Find the value of the bellow bond in order to assist ne with the investment decision
- Investment End of Year A B C 1 $ 2,000 $ 1,000 $ 4,000 2 3,000 1,000 4,000 3 4,000 1,000 (4,000) 4 (5,000) 1,000 (4,000) 5 5,000 3,000 14,000 What is the present value of each of these three investments if the appropriate discount rate is 11 percent? a. What is the present value of investment A at an annual discount rate of 11 percent? b. What is the present value of investment B at an annual discount rate of 11 percent C. What is the present value of investment C at an annual discount rate of 11 percent?Annual cash inflows from two competing investment opportunities aregiven. Each investment opportunity will require the same initial investment.Year AInvestmentB123$10,00013,000$39,00016,000$13,000$13,00013,000$39,000Requirement1. Assuming a 12% interest rate, which investment opportunity would you choose?Using the below informtion answer: 5.1 Payback Period of Project Tan (expressed in years, months and days). 5.2 Net Present Value of Project Tan.5.3 Accounting Rate of Return on average investment of Project Tan (expressed to two decimal places). INFORMATIONThe management of Mastiff Enterprises has a choice between two projects viz. Project Cos and Project Tan, each ofwhich requires an initial investment of R2 500 000. The following information is presented to you: PROJECT COS PROJECT TANNet Profit Net ProfitYear R1 130 000 80 0002 130 000 180 0003 130 000 120 0004 130 000 220 0005 130 000 50 000A scrap value of R100 000 is expected for Project Tan only. The required rate of return is 15%. Depreciation is calculatedusing the straight-line method.