Q: NPV(Net Present Value) with discount rate is 6% for this period and cashflow as followed. Period 0,…
A: Cash flows are the cash generated from the operation of the business organisation. In other words,…
Q: What is the net present worth of the cash flow series below at an interest rate of 9% End of Period…
A: YEAR CASH FLOW DISCOUNT RATE 0 -100.00 1 -150.00 2 -200.00 3 -250.00 4 -300.00 5…
Q: The cash flows have a present value of 0. Compute the value of J, assuming a 6% interest rate.
A: The present value of an annuity is the current worth of the annuity received at a future date at a…
Q: ΕΟΥ 3 4 Cash Flow $15,000 $22,000 $29,000 $8,000 $36,000 What is the uniform annual equivalent if…
A: Interest Rate = 12% Year Cash Flow 1 8000.00 2 15000.00 3 22000.00 4 29000.00 5…
Q: Calculate the total present value
A: Today’s worth of dollars at a later date is the Present Value of the dollar. For example, the value…
Q: 1. Consider the cash flow shown below. What value of C makes the inflow series equivalent to the…
A: The present value method is important in capital budgeting. In the net present method, the present…
Q: (20,300) 8 $0 (16Q) a. If the value of Q is $2,750 at what interest rate will the net cash flow be…
A: In this question one has to solve for the Rate at which the NPV is zero and that rate is called…
Q: What is the NPV for the following set of cash flows with a discount rate of 16.7 percent? (Round…
A: The (PV) present value of an investment project's projected net cash flows is called NPV.
Q: Calculating Profitability Index [L07] What is the profitability index for the following set of cash…
A: The Profitability index = Present value of future cash inflow / Initial Investment
Q: BASIC (Questions 1–22) 1. Calculating Payback What is the payback period for the following set ofr…
A: Year Cash flow 0 -7800 1 3100 2 3200 3 2200 4 1400
Q: What is the present value of the following cash-flow stream if the interest rate is 4%? Year 1:…
A: Present value of cashflow stream is the sum of Present value of future cashflows
Q: Year Cash Flow $275.000 1 $35,000 2 $65.000 36 $95.000 $135.000 $185.000 9-20 $245,000 Given the…
A: The Payback period is one of the capital budgeting techniques that do not take into account the…
Q: PMT Question 4: What is the annual worth of the given cash flow applied to 8 years? Assume the…
A: Interest Rate(Rate) 13.50% Time Period (Years)(NPER) 8 Year Cash Flow 1 24,000.00 2…
Q: Problem 8) For the cash flow diagram given below, compute the rate of return. $300 $250 $250 $200…
A: Rate of return is where present value of cashinflows equals to initial investment.
Q: Problem 6-28 Discounted Cash Flow Analysis [LO1] The appropriate discount rate for the following…
A: Present worth or value (PW) of money/cash flow refers to the current value of any future sum of…
Q: Solve for X to make the two cash flow diagrams equal. Use 10% CA rate. 1,000 200 Quarter Quarter 1 2…
A: Cash flow is a diagramatic representation of the cash in flows and outflows of a project. Upward…
Q: State the value of C that makes the following two cash flow transactions economically equivalent at…
A: The computations as follows:
Q: Please solve using time value of money table. Thank You! t 2 3 4 5 6 $ 100 -1000 400 300 -100 i 2%…
A: The question is based on the concept of the time value of money. The true value of money keeps on…
Q: For the following stream of free cash flows, calculate the npv if the discount rate is 12.5%
A: Net Present Value: It is the difference between the cash outflow and the discounted cash inflows.…
Q: Problem 1.0 Compute equivalent uniform annual worth (EUAW) considering 10% interest rate for the…
A: Equivalent Uniform Annual Worth: The Yearly Value (AW) Analysis is defined as the equivalent uniform…
Q: 10. Consider the following cash flow series at varying interest rates. Interest rates: Between 0 to…
A: Interest rate in year n = rn r1 = 5% r2 = 8% r3 = 10% r4 = 6% Cashflow in year n = CFn CF1 = $1000…
Q: Solve for X to make the two cash flow diagrams equal. Use 10% CA rate. 1,000 200 Quarter t Quarter 1…
A: Cash flow is a diagramatic representation of the cash in flows and outflows of a project. Upward…
Q: For what value of n, based on a 5% interest rate, do these cash flows have a present value of 0?
A: An Annuity is a series of payments of fixed amounts and at fixed intervals. These can be of two…
Q: Problem 1 The cash flow shown in Figure 1 is in $1000 units. With an interest rate of 10%, determine…
A: Interest rate = 10% Year Cash flow 1 500000 2 600000 3 700000 4 800000 5 900000 6…
Q: At a rate of 6.5%, what is the future value of the following cash flow stream? Years 1 2 3 4 Cash…
A: Interest rate = 6.5% Year Cash flow 0 0 1 75 2 225 3 0 4 180.21
Q: Consider the following cash flows. The interest rate is 8%. What is the duration (hint: you need…
A: Interest rate = 0.08 Cash flow duration is the weighted-average time to maturity of the cash…
Q: For a given cash flow diagram, if the interest rate i=10% , and A=$600, the F value is closest to:…
A: Future value of the annuity "A" of $600 for 5 years and "P" of $4000 at year 0 needs to be…
Q: Q1! Solve for the present worth of this cash flow using at 12% interest rate annually. t60 130 160…
A: Interest Rate = 12% annually In order to calculate present Worth we have to calculate the present…
Q: • 4. Compute the present value and future value of P200 cash flow for the following combination of…
A: Present Value Meaning Given a certain rate of return, present value (PV) is the current value of a…
Q: .56 Consider the cash flow series given in the accompanying table. What value of C makes the deposit…
A: The current value of a prospective sum of money or series of payments with a predetermined rate of…
Q: State the value of C that makes the following two cash flow transactions economically equivalent at…
A: The present value of a cash flow is the current worth of a cash flow at a certain rate of interest…
Q: a given cash flow diagram, if the interest rate i=10% , and A=$600, th F=? A Years 2 i=10 %
A: The given series represents an annuity. An annuity is a series of uniform cash flows over a period…
Q: (A_FIG1) In the following cash flows diagram, Determine the value of Z if the interest rate i = 8%…
A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…
Q: Solve for the present worth of this cash flow using at 12% interest rate annually. 60 630 160 190 1…
A: Interest Rate =12% Annually Present Worth is Present value of future cash flows. Future cash flow =…
Q: Consider the following cash flow diagram. What value of C makes the inflow series equivalent to the…
A: The present value of the cash flow is the current worth of a cash flow at a certain rate of interest…
Q: 1. Find the present value of the following cash flow streams under the following conditions: Year…
A: Cash flow streams refers to the series of cash flows whether cash inflows or cash outflows incurred…
Q: Consider the following cash flows: Year Cash Flow 32,000 1 13,700 18,000 11,100 a. What is the NPV…
A: Net Present value is present value of cash flow minus initial investment
Q: Determine the value of Z on the left-hand side of the cash flow diagram below that establishes…
A: Cash flow diagram shows sequence of cash inflows and outflows of an project or investment at equal…
Q: Question 3 Find the value of x in the diagram below that would make the equivalent present worth of…
A: If present value=$22000, then value at the end of 2nd year is: FUTURE VALUE=PV1+rn=22000(1+0.13)2…
Q: Internal Rate of Return (IRR) =?
A: It refers to the rate of return that is computed by the company to make a decision of selection of a…
Q: - For what value of V will the following cash flow be equivalent for interest rate equal to 9%?…
A: The present value is the value of the sum received at time 0 or the current period. It is the value…
Q: 5. You are given the following cash flows. What is the present value (t = 0) if the discount rate is…
A: The Present Value is the current value of a future amount i.e., it is the amount to be invested…
Q: Consider a series of cash flows as follows: £750 received one year from now, £1,200 received three…
A: Let's start understand with the meaning, Present value:- It is a present worth of cashflow that will…
Q: t the net cash flows below, what is the value of x if the rate of return is 1067 (select the losest…
A: Year Cash flow 0 -13000 1 -29000 2 -25000 3 X 4 -8000 Rate of return = 10%
Q: Q4: Consider the following cash flow diagram. What is the value of X if the present worth of the…
A: Present Worth: It is the present value of the future annual cash flows or future sum of money.…
Q: QUESTION 6 For the given cash flow, if A= $8000 , the present value P is closest to: $6000 A 8.…
A: A = 8000 N = Number of cash flows = 6 T = Time period for discounting A = 2 Immediate cash flows…
Q: (A_FIG1) In the following cash flows diagram, Determine the value of Z if the interest rate i = 8%…
A: The interest rate is 8%. We have to calculate the present value.
Step by step
Solved in 4 steps with 2 images
- Depreciation Jensen Inc., a graphic arts studio, is considering the purchase of computer equipment and software for a total cost of $18,000. Jensen can pay for the equipment and software over three years at the rate of $6,000 per year. The equipment is expected to last 10 to 20 years, but because of changing technology, Jensen believes it may need to replace the system in as soon as three to five years. A three-year lease of similar equipment and software is available for $6,000 per year. Jensens accountant has asked you to recommend whether the company should purchase or lease the equipment and software and to suggest the length of time over which to depreciate the software and equipment if the company makes the purchase. Required Ignoring the effect of taxes, would you recommend the purchase or the lease? Why or why not? Referring to the definition of depreciation, what appropriate useful life should be used for the equipment and software?REPLACEMENT ANALYSIS St. Johns River Shipyards is considering the replacement of an 8-year-old riveting machine with a new one that will increase earnings from 24,000 to 46,000 per year. The new machine will cost 80,000, and it will have an estimated life of 8 years and no salvage value. The new riveting machine is eligible for 100% bonus depreciation at the time of purchase. The applicable corporate tax rate is 25%, and the firms WACC is 10%. The old machine has been fully depreciated and has no salvage value. Should the old riveting machine be replaced by the new one? Explain your answer.Net present value method for a service company Coast-to-Coast Inc. is considering the purchase of an additional delivery vehicle for 70,000 on January 1, 20Y1. The truck is expected to have a five-year life with an expected residual value of 15,000 at the end of five years. The expected additional revenues from the added delivery capacity are anticipated to be 65,000 per year for each of the next five years. A driver will cost 40,000 in 20Y1, with an expected annual salary increase of 2,000 for each year thereafter. The annual operating costs for the truck are estimated to be 6,000 per year. a. Determine the expected annual net cash flows from the delivery truck investment for 20Y120Y5. b. Compute the net present value of the investment, assuming that the minimum desired rate of return is 12%. Use the present value table appearing in Exhibit 2 of this chapter. c. Is the additional truck a good investment based on your analysis? Explain.
- Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6 years, and an estimated salvage value of 800. The replacement machine is eligible for 100% bonus depreciation at the time of purchase- The replacement machine would permit an output expansion, so sales would rise by 1,000 per year; even so, the new machines much greater efficiency would cause operating expenses to decline by 1,500 per year The new machine would require that inventories be increased by 2,000, but accounts payable would simultaneously increase by 500. Dautens marginal federal-plus-state tax rate is 25%, and its WACC is 11%. Should it replace the old machine?Filkins Fabric Company is considering the replacement of its old, fully depreciated knitting machine. Two new models are available: Machine 190-3, which has a cost of $190,000, a 3-year expected life, and after-tax cash flows (labor savings and depreciation) of $87,000 per year; and Machine 360-6, which has a cost of $360,000, a 6-year life, and after-tax cash flows of $98,300 per year. Knitting machine prices are not expected to rise because inflation will be offset by cheaper components (microprocessors) used in the machines. Assume that Filkins’ cost of capital is 14%. Should the firm replace its old knitting machine? If so, which new machine should it use? By how much would the value of the company increase if it accepted the better machine? What is the equivalent annual annuity for each machine?Grummet Company is acquiring a new wood lathe with a cash purchase price of $80,000. The Wood Master Industries (the manufacturer) has agreed to accept $23,500 at the end of each of the next 4 years. Based on this deal, how much interest will Grummet pay over the life of the loan? A. $94,000 B. $80,000 C. $23,500 D. $14,000
- For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a ten-year remaining legal life was purchased for $300,000. The patent will be usable for another eight years. B. A patent was acquired on a new smartphone. The cost of the patent itself was only $24,000, but the market value of the patent is $600,000. The company expects to be able to use this patent for all twenty years of its life.The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to generate net after-tax operating cash flows, including depreciation, of $6,250 per year. The truck has a 5-year expected life. The expected salvage values after tax adjustments for the truck are given here. The company’s cost of capital is 10%. Should the firm operate the truck until the end of its 5-year physical life? If not, then what is its optimal economic life? Would the introduction of salvage values, in addition to operating cash flows, ever reduce the expected NPV and/or IRR of a project?