Project Cash Flows B Period A D -$4,300 -$3,500 -$5,500 -$3,800 1 $O $1,500 $3,000 $1,800 2 $0 $1,800 $2,000 $1,800 3 $5,500 $2,100 $1,000 $1,800
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Consider the following sets of investment projects:
Compute the equivalent annual worth of each project at i = 13%, and determine the acceptability of each project.
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- The project's IRR? Year 0 1 2 3 4 5 Cash flows -$8,750 $2,000 $2,025 $2,050 $2,075 $2,100The 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?ind the IRR for the following cash flows assuming a WACC of 10%. YR CF 0 -15,000 1 6,000 2 4,000 3 2,000 4 3,000 5 2,000
- Question Content Area A project is estimated to cost $273,840 and provide annual net cash inflows of $60,000 for 7 years. Year 6% 10% 12% 1 0.943 0.909 0.893 2 1.833 1.736 1.690 3 2.673 2.487 2.402 4 3.465 3.170 3.037 5 4.212 3.791 3.605 6 4.917 4.355 4.111 7 5.582 4.868 4.564 8 6.210 5.335 4.968 9 6.802 5.759 5.328 10 7.360 6.145 5.650 Determine the internal rate of return for this project by using the above present value of an annuity table.fill in the blank 1 of 1%The following were taken from the proposed investment plan of Satue Incorporated: Cost of investment, P500,000; net cash inflows: P200,000; P150,000; P150,000; P100,000; and P50,000 for years 1, 2, 3, 4, and 5, respectively; and salvage value: P200,000; P150,000; P100,000; P70,000 and P50,000, for years 1, 2, 3, 4, and 5, respectively. Determine the bail-out years. • 3• 1• 2• 4Payback Machine X Cumulative cash flow Machine Y Cumulative cash flow Investment 1,000,000 1,000,000 (1,000,000) (1,000,000) Year 1 $500,000 (500,000) $200,000 (800,000) Year 2 $500,000 0 $300,000 (500,000) Year 3 $300,000 $500,000 0 Year 4 $100,000 $500,000 Payback 2 years 3 years ARR Machine X ARR = Average Profit Average investment Therefore: Depreciation (1000, 000-200,000) /4 = 200000 = 200,000X 4 = 800,000 Profits before depreciation 1400,000 Less depreciation (800,000) Accounting Profit 600,000 Average profits 600,000/4yrs =150,000 Average investment = (initial investment + residual value)/2 = (1,000,000 + 200,000)/2 = 600,000 (Average profit/ average investment) X 100 = (150,000/600,000) X 100 = 25% Machine Y…
- Q15. For the cash flows shown, determine the incremental cash flow between machines B and A (a) in year 0, (b) in year 3, and (c) in year 6. Machine A B First Cost, $ -13,000 –25,000 AOC, $ per Year -1,300 –400 Salvage Value, $ 5,000 6,000 Life, Years 3 6 a) The incremental cash flow between machines B and A in year 0 is $ . b) The incremental cash flow between machines B and A in year 3 is $ . c) The incremental cash flow between machines B and A in year 6 is $ .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 yearsHow do you calculate the NPV and IRR Project 1 Year Cashflows Discount Rate 10% 0 $ (750,000.00) 1 $ 250,000.00 2 $ 300,000.00 3 $ 350,000.00 4 $ 200,000.00 5 $ 100,000.00 Project 2 Year Cashflows Discount Rate 10% 0 $ (1,000,000.00) 1 $ 200,000.00 2 $ 300,000.00 3 $ 400,000.00 4 $ 500,000.00 5 $ 700,000.00
- Assets 2001 2000 Cash 7,282 9,000 Short term investment 0 48,600 Acc. Receivable 632,160 351,200 Inventories 1,287,360 715,200 Total current assets 1,926,802 1,124,000 Fixed Assets Plant & Equipment 1,202,950 491,000 Less: Acc dep 263,160 146,200 939,790 344,800 Total assets 2,866,592 1,468,800 Liabilities & Equities Current liability A/c Payable 524,160 145,600 Notes payable 720,000 200,000 Accruals 489,600 136,000 total Current liability 1,733,760 481,600 Long-term debt 1,000,000 323,432 Common Stock 460,000 460,000 Retained Earning -327,168 203,768 1,132,832 987,200 Total equities 2,866,592 1,468,800 Income Statement Sales 5,834,400 3,432,000 Cost of Goods Sold 5,728,000 2,864,000 Other expense 680,000 340,000 dep 116,960 18,900…Multiple choice:The following cashflows were provided by Del Monte Products, Inc. in relation to its plan of investing in a replacement machine: Net investment, P2,000,000; Net cash inflows: P800,000; P700,000; P500,000; and P400,000 for years 1, 2, 3, and 4, respectively. The payback period (in years) is: • 1• 3• 2• 4Company Express S. A. asks you to construct cash flows for following three (3) investment projects, containing following information:PROJECT 1a. Sales (in ThCh$):- Year 1: 90,000- Year 2: 55,000- Year 3: 75,000- Year 4: 190,000b. Cost of sales is estimated at 53% of sales.c. Depreciation for year is ThCh$ 15,000 per period (period 1 to 3). In year 4 there is a sale of machinery that results in a gain on sale of non-current assets of ThCh$ 9,800. Total depreciation for year 4 is ThCh$ 12,500.d. Administrative expenses are equivalent to 17% of sales.e. In period 0 there is an investment of ThCh$ 58,000.f. There is credit financing of ThCh$ 32,000 which is amortized in equal parts of ThCh$ 8,000 per period with a financial expense of ThCh$ 3,700 per period.g. There is an investment in working capital of ThCh$ 24,000 in period 0, which is recovered in period 4.h. In period 4 there is an investment in land of ThCh$ 40,000.i. Income tax rate is 17%. Calculate: cash flow per period. Please…
