Question 2 Figure 2 shows the payments and revenues of a small project. If M.R.R.R= % 12, Evaluate the project economically using A.W method $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $3,000 0 2 $500 $20,000 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 Figure 2
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- QUESTION 5Read the information below and answer the following questionsINFORMATIONThe management of Mastiff Enterprises has a choice between two projects viz. Project Cos and Project Tan, each ofwhich requires an initial investment of R2 500 000. The following information is presented to you:PROJECT COS PROJECT TANNet Profit Net ProfitYear R R1 130 000 80 0002 130 000 180 0003 130 000 120 0004 130 000 220 0005 130 000 50 000A scrap value of R100 000 is expected for Project Tan only. The required rate of return is 15%. Depreciation is calculated using the straight-line method.5.4 Benefit Cost Ratio of Project Cos (expressed to three decimal places). 5.5 Internal Rate of Return of Project Cos (expressed to two decimal places) USING INTERPOLATION.QUESTION 2 One of the reports submitted by the infrastructure development team revealed the following Year 0 1 2 3 4 Cashflows A -R 210000 ,R15000 ,R 30000 , R 30 000 ,R 370000 Cashflow B -R 21000 , R11000 ,R 9000, R11000, R 9000 Suppose you require a 15 per cent return on investment. 2.1 Using the discounted payback period which investment would you choose and why? 2.2 If you apply the NPV rule which investment, will you choose and why? 2.3 Based on the provided answers which project would you finally choose and why? All parts correctly pls with explanation thanks!Question 6 XY Company is considering 5 investment projects as follows: Project Investment ($) Profitability index (PI) A 10,000 1.2 B 6,000 1.1 C 18,000 1.6 D 14,000 0.9 E 12,000 1.3 The company has $30,000 available for investment. Projects C and E are mutually exclusive. All projects can be undertaken only once and are not divisible. Required: (ii)Rank the projects PI and NPV
- Question 3 The following information relates to three possible capital expenditure projects. Because of capital rationing only one project can be accepted. Project: A B C . Initial cost R100 000 R115 000 R90 000 Expected life 5 years 5 years 4 years Scrap value R5 000 R7 500 R4 000 Cash-inflows R R R End year 1 40 000 50 000 27 500 2 35 000 35 000 32 500…(6.1) Please provide step by step explnation (no working out on excel) q3- A project will require an initial outlay of $4000 and will result in a cash inflow of $4400 in 3 years' time. These are the only cash flows from the project. If the cost of capital is 6%, what is the NPV of the project? a. $151 b. $-299 c. $-321 d. $-306 Clear my choiceQ6) IBM networks want to modernize their networking system. Proposals have been received from two major software companies. The first proposal cost $6million but will raise the firm’s annual cash flows by $3million. The second proposal cost $7million and provides cash flow of $3.5million a year. Both projects have a life span of 3 years. Assuming that the cost of capital is 8%, which proposal may be recommended on the basis of Net Present Value criteria. Select one: a. Project B, NPV 1731290 b. Project A, NPV 20198 c. Project B, NPV 2019839 d. Project A, NPV 2019839
- Question 2- UNIT 2: CAPITAL BUDGETTING PROCESS UNIT 3: CASH FLOW ESTIMATION Dorati Inc. is considering two mutually exclusive projects. Dorati used a 15% required rate of return to evaluate capital expenditure projects. A) Assuming the two projects have the costs and cash flows shown below, determine the NPV for each using a replacement chain. Year Project S Project T 0 –$70,000 –$100,000 1 $50,000 $ 60,000 2 $60,000 $ 70,000 3 $ 80,000 4 $ 90,000 B) Assume in two years Project S will still cost $70,000 and produce the same two years of cash flows. Find the IRR (using 6% & 8% or 10% & 11%) of an investment having initial cash outflow of $3,000. The cash inflows during the first, second, third and fourth years are expected to be $700, $800, $900 and $1,200 respectivelyQuestion 16 The following information relates to three possible capital expenditure projects. Because of capital rationing only one project can be accepted. Project: A B C . Initial cost R100 000 R115 000 R90 000 Expected life 5 years 5 years 4 years Scrap value R5 000 R7 500 R4 000 Cash-inflows R R R End year 1 40 000 50 000 27 500 2 35 000 35 000 32 500…A4 9a We find the following information on NPNG (No-Pain-No-Gain) Inc.: A4 9a EBIT = $2,000,000Depreciation = $250,000Change in net working capital = $100,000Net capital spending = $300,000 These numbers are projected to increase at the following supernormal rates for the next three years, and 5% after the third year for the foreseeable future: EBIT: 20%Depreciation: 10%Change in net working capital: 15%Net capital spending: 10% The firm’s tax rate is 35%, and it has 1,000,000 outstanding shares and $8,000,000 in debt. We have estimated the WACC to be 15%. a. Calculate the EBIT, Depreciation, Changes in NWC, and net capital spending for the next four years.
- Q No.1 HASF Inc, has two investment proposals, which have the following characteristics Project A Period Cost Profit after tax Net cash flow 0 15,000 ------ ------- 1 1000 5000 2 1000 4000 4 1000 3000 Project B Period Cost Profit after tax Net cash flow 0 10000 ------- -------- 1 1000 5000 2 1000 5000 3 4000…Project X Project Y Year Cash Flow Cash Flow 0 -$1000 -$1000 1 100 400 2 300 400 3 500 400 4 800 400 The cost of capital is 5 percent. 1. What is each project’s NPV? Which project would you choose based on NPV rule? 2. What is each project’s IRR? Which project would you choose based on IRR rule? 3. Why IRR rule and NPV rule lead to different decisions? Which rule is more appropriate to evaluate mutually exclusive projects? Why?Pls fast pls dont usd chatgpt.Westchester Water Works Systems is considering a project that has the following cash flow and cost of capital data. What is the project's MIRR? Cost of capital: 10.00% Year 0 1 2 3 Cash flows -$1,000 $400 $400 $400 Potential answers: 10.35% 9.81% 9.32% 14.20% 12.78%