Q: The manufacturing firm Rebo is considering a new capital investment project. The project will last…
A: NPV is calculated by deducting present value of cash outflows from present value of cash inflows.
Q: what is the expected return on a portfolio that is invested 70 in k and 30 given the following…
A: Average Return in scenario 1 = (16+13)/2 = 14.5% Average Return in scenario 2 = (12+8)/2 = 10%
Q: Do you think that the provisions of the new contract will increase morale and decrease turnover? Why…
A: Contract refers to an agreement enforceable by law. It is legal agreement held between two or more…
Q: 12.1 Calculating the Cost of Equity Suppose stock in Boone Corporation has a beta of .90. The market…
A: Cost of equity is defined as the return, where the corporation used to need for the project or…
Q: A 180-day note was signed on June 11 for $24, 700. The note has a rate of 9.5%, compounded annually.…
A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…
Q: XYZ Inc., the Calapan-based computer manufacturer, has developed a new all-in-one device: phone,…
A: Land Cost $ 1,00,000.00 Net working capital $ 1,75,000.00 Construction Costs $…
Q: maintenance costs of this equipment are estimated to be about $25,000 per year. Salvage value is…
A: EUAC is uniform annual equivalent cost that is equivalent to all costs of equipment.
Q: I. Find the trade discount and net price. Round to the nearest cent. Trade Discount List Price Trade…
A: Solution: Trade discount is the discount given on listed price in the normal course of business. The…
Q: Determine whether the following statements are TRUE or FALSE. Briefly explain your answers. (a)…
A: The yield is inversely proportional to price. When the price is equal to par value, yield is equal…
Q: Matchroom's investment appraisal committee have worked out the Net Cash flows in the working shown…
A: Discount Rate 10% Discount Rate 20% Year Net CashFlows 0 -£ 1,14,285.71 1 £…
Q: Pperating cycle of GLOBE * STATEMENT OF FINANCIAL POSITION AND INCOME STATEMENT OF 3 COMPANIES AS…
A:
Q: The expected returns for David’s portfolio were calculated based on three possible conditions in the…
A: Standard deviation is a measure of unsystematic risk which shows the variability of returns of a…
Q: If she can sell the car after 3 years for $40,000, what is the total amount she will pay over the…
A: Loan amortization refers to a schedule which is prepared to shows the periodic loan payments, amount…
Q: What is the expected rate of return for the Philippine Stock Index Portfolio? STOCK MARKET VALUE…
A: Expected Return: The expected return is the minimum required rate of return which an investor…
Q: A student needs P4000 per year for 4 years to attend college. Her father invested P5000 in a 7%…
A: Assuming, The investment made at the start of Year 1 Future Value of 5000 at end of Year 16 =…
Q: areq is about to make his dream of a house of his own ome true. For years he has been saving for…
A: Down Payment = 1,500,000 * 10% = 150,000 Loan Taken = House Price - Down-payment = 1,500,000 -…
Q: Sandhill Inc. wants to purchase a new machine for $37,840, excluding $1,300 of installation costs.…
A: Before investing in new projects or assets, profitability of the project is evaluated by using…
Q: Production, Direct Labor, Direct Materials, Sales Budgets, Budgeted Contribution Margin Greiner…
A: Answer- Working Note : Greiner Company Production Budget For the First Quarter of the…
Q: Explain each of the investment instruments stated below that offered by financial institutions.…
A: In the world of investing and finance there are several investment instruments. A person or an…
Q: borrowed $69,100 to purchase a home the bank offered her an APR of 4.12% for a term length of 20
A: A mortgage is a loan that is used to buy or maintain a home, land, or other type of real estate. The…
Q: In mid-2015, Microsoft Corporation had a market capitalization of $340 billion, $35 billion in debt,…
A: The beta of a company indicates the sensitivity of the stock prices or prices of assets to the…
Q: Practice 1 In-place overhead crane that cost $350,000 three years ago can be purchased used on…
A: Given, Cost of crane =$350,000 (3 years ago)Purchase price=$200,000 (present)Crane's Book value=…
Q: Bill's Bakery has current earnings per share of $2.50. Current book value is $4.30 per share. The…
A: Data given: Current earning per share = $2.50 Current book value per share = $4.30 per share…
Q: A new production system for a factory is to be purchased and installed for $115,042. This system…
A: Initial investment = 115,042 Annual dollar savings = Savings in electricity consumption * cost per…
Q: Luther Corporation Consolidated Balance Sheet December 31, 2006 and 2005 (in S millions) Liabilities…
A: Total debt = Notes payable + Current maturities of long term debt + Long term debt Book value of…
Q: What is the yield to maturity for the following bond: current price is $908, coupon rate is 11…
A: Here, Present value (PV) = $908 Maturity value (FV) = $1,000 Coupon rate = 11% Time to maturity (n)…
Q: o. Denive Lu uhere symbols have their usual meonings
A: F=1+in-1iAF = Future valuei = interest raten=number of periodA=Annuity amountFuture value…
Q: A company has 200,000 bonds outstanding currently trading at $924, a current stock price of $24,…
A: WACC refers to the joint cost of company's capital from all the sources of the company. It includes…
Q: Debt ratio of GLOBE * STATEMENT OF FINANCIAL POSITION AND INCOME STATEMENT OF 3 COMPANIES AS…
A: Ratio is a tool which is used to measure the growth and performance of the firm by establishing the…
Q: 3) What is the capitalized worth, when i 12% per year, of $2.000 per year, starting in year one and…
A: Annual cost (A) = $2000 Repeating cost (R) = $11000 in year 5, every 4 years i = 12%
Q: The present value of a sum of money is the amount that must be invested now, at a given rate of…
A: Solution: Amount invested today is called present value and amount with interest at maturity is…
Q: What is the simple interest on ₱ 30,000 for six months at a simple interest rate of 12% (b) What is…
A: Answer - Part a - Calculation of Simple Interest - Simple Interest = PRT /100 Given, P = 30,000 R =…
Q: In a scenario where in there is a higher number of compounding periods within a given year, this…
A: The interval between the last compounding of interest and the next compounding of interest is…
Q: or buys a land for PhP 1M and constructs a three-door apartment for students worth PhP 5M. He…
A: IRR is internal rate of return achieved on the investment where the present value of cash flow is…
Q: Interest coverage ratio of JFC *
A: In the given question, we have to calculate the Interest Coverage ratio of the JFC.
Q: 8. Suppose a certain bond sold a volume of 2, 375, 000. If the bonds sold for $824.99, calculate the…
A: A bond is a debt instrument floated by a company for raising debt funds. It carries a fixed interest…
Q: Briefly explain three risk exposures that an analyst should report as part of an enterprise risk…
A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…
Q: ABC Co. expects a payment from an American customer in 30 days. To hedge its currency exposure, ABC…
A: Solution:- Forward means entering into an agreement to sell or buy something on a future date at…
Q: The Excel formula to compute the accrued days in PH Bonds
A: The excel formula to calculate the accrued days is DAYS360.
Q: You are a credit analyst of a growing commercial bank and have recently received loan applications…
A: Given, Two companies Company Blue and company Red.
Q: (#12) (#14)
A: In the double declining balance method, we have to put the residual balance upto extent of salvage…
Q: Which of these has the biggest potential risk area? O a. Cash Machines O b. Mobile Banking O c.…
A: A cash machine can be defined as a machine that dispenses cash to the users by inserting a card;…
Q: How much money be invested today in order to withdraw P1500 per year at the end of each year for 8…
A: Annual withdrawal (P) = P1500 Interest rate (r) = 8% Number of withdrawals (n) = 8
Q: Average age of inventory of JFC * STATEMENT OF FINANCIAL POSITION AND INCOME STATEMENT OF 3…
A: Average age of inventory is the time taken for inventory to sell of as finished goods. Average age…
Q: 2. A bond has a par value of $100, a coupon rate of 10.75% and matures in 5 years. If interest is…
A: Solution:- Bond’s value means the price at which bond is trading today in the market. Bond value is…
Q: XYZ Ltd.’s IPO was severely under-priced based on the first day’s closing price. How would it affect…
A: A stock market is generally a collection of stock exchanges or other places where the shares of a…
Q: Calculate the value of a 6 year 2% coupon bond with semiannual payments, 1000 par. Expected return…
A: The present value of the bond or the current value of the bond is the market price of the bond. It…
Q: maxımum time to complete. It also show to plan her projects effectively.
A: C. The critical path method
Q: A cutting edge metallic 3D printer is purchased by Helix Corp for $160000. It is expected to last 9…
A: The following information has been provided in the question: Cost of metallic printer =$160000 Life…
Q: How much money be invested today in order to withdraw P1500 per year at the end of each year for 8…
A: Annual withdraw (W) = P1500 Interest rate (i) = 8% Period (t) = 8 Years
Question three
For each of the following projects compute (i) pay-back period, (ii) post payback
profitability and (iii) post-back profitability index
- Initial outlay 50,000,000
Annual
Estimated life 8 Years
- Initial outlay 50,000,000
Annual cash inflow (after tax but before depreciation)
First three years Shs .15,000,000
Next five years Shs. 5,000,000
Estimated life 8 Years Salvage Shs. 8,000,000
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
- Capital rationing decision involving four proposals Kopecky Industries Inc. is considering allocating a limited amount of capital investment funds among four proposals. The amount of proposed investment, estimated income from operations, and net cash flow for each proposal are as follows: The company’s capital rationing policy requires a maximum cash payback period of three years. In addition, a minimum average rate of return of 12% is required on allprojects. 1f the preceding standards are met, the net present value method and presentvalue indexes are used to rank the remaining proposals. Instructions Compute the present value index for each oldie proposals in part (4). Round to two decimal places.Assume San Lucas Corporation in MAD 26-1 assigns the following probabilities to the estimated annual net cash flows: a. Compute the expected value of the annual net cash flows. b. Determine the expected net present value of the equipment, assuming a desired rate of return of 10% and the expected annual net cash flows computed in part (a). Use the present value tables (Exhibits 2 and 5) provided in the chapter in determining your answer. c. Based on your results in parts (a) and (b), should San Lucas Corporation invest in the equipment?Payback 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. Answer
- Question 3 A company is considering investing in three projects A, B and C with initial investment of $1,200 and a life of 5 years. The following table indicates the profits that are estimated from each project: After Tax & Depreciation Profits Year Project A Project B Project C 1 300 300 450 2 300 200 450 3 300 400 350 4 300 350 100 5 300 350 100 Total 1,500 1,600 1,450 Required: Calculate the Accounting Rate of Return on initial capital for each project. Calculate the Accounting Rate of Return on average capital for each project. Assuming that financing is available outline three (3) major factors which will influence the investor’s decision to invest. State two (2) drawbacks of the Accounting Rate of Return method of project appraisal.Question 13 Munir S/B has provided the following data concerning a proposed investment project: Initial investment.................. $861,000 Annual net cash receipts...... $271,000 Life of the project................. 5 years Salvage value...................... $129,000 The company's tax rate is 30%. For tax purposes, the straight line method will be used and capital allowances (CA)s will be claimed only over 3 years over the entire initial cost without any reduction for salvage value. The company uses a discount rate of 11%. Required: (ii)Calculate the taxable cash flows for years 1-3Economics Assume the data below describes the real cash flow of a 9-year project and all expenditures made at the beginning of each period. Using 10% discount rate, the investment cost (for the first four years starting from year 0), in present value terms, in year 0 is $1,403.08 and $1,867.50 when evaluated as of the beginning of year 4. What is the accrued opportunity cost of capital at the beginning of year 4? Year 0 = -500 Year 1 = -200 Year 2 = -600 Year 3 = -300 Year 4 = +520 Year 5 = +634 Year 6 = +736 Year 7 = +785 Year 8 = +861
- (IRR calculation) Determine the IRR on the following projects: a. An initial outlay of $12,000 resulting in a single free cash flow of $17,123 after 8 years b. An initial outlay of $12,000 resulting in a single free cash flow of $50,395 after 14 years c. An initial outlay of $12,000 resulting in a single free cash flow of $107,058 after 23 years d. An initial outlay of $12,000 resulting in a single free cash flow of $13,576 after 5 years Question content area bottom Part 1 a. What is the IRR of a project with an initial outlay of $12,000 resulting in a single free cash flow of $17,123 after 8 years? enter your response here% (RoundHelp please The following details relate to a particular asset Future Cash flows (per annum) 90,000 Expected period of cash flows 3 years Discount Rate 10% Open market price of asset 210,000 Cost of asset 630,000 Accumulated depreciation 450,000 Calculate both : a)determine the recoverable amount for this asset b)Determine whether the asset is impairedA company project capitalized for $ 50,000 invested in depreciable assets will earn a uniform annual income of $ 19,849 in 10 years. The costs for operation and maintenance totals $ 9,000 each year. If the company expects its capital to earn 12% before income taxes, is the investment worthwhile? Determine by usinga.) Rate of Return Method; b.) Annual Worth Method c.) Present Worth Method
