Question 2 Sunshine Corporation is reviewing an investment proposal. The initial cost of the investment is R52 500. The estimated cash flows and net profit for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. year Net cash flows Net profit   R20 000 R2 500   R17 500 R3 500   R15 000 R4 500   R12 500 R5 500   R10 000 R6 500 The cost of capital is 12%. Required: Calculate the following: 1. Payback Period  2. Net Present value  3. Accounting rate of return

Q: 4. What is the contributed capital at year-end? a. 2,300,000 b. 1,500,000 c. 2,000,000 d. 1,200,000

A: Every business needs funds in order to run in an effective manner. There are various sources and…

Q: Baltusrol Inc. has the following three investment opportunities. A P70,000 10,000 Initial investment…

A: Payback period is the amount of time required to recover initial investment.

Q: Q2 The Microsoft company has an expected ca action as follows: YO = -110,000$, Y1 = -140,000…

A: Given that,  Rate of Interest , R=24% Time = 3 Years

Q: Problem 2 ABM Enterprise would like to evaluate/analyze an investment proposal. Siven the following:…

A: The Net Present Value: Managers constantly use capital budgeting tools to assess prospective…

Q: 1. A company is evaluating two projects, A and B. The company's cost of capital has been determined…

A: Net present value technique is a discounted cash flows method that considered the time value of…

Q: QUESTION 2. management whether it should be accepted 21%. Evaluate the following investment project…

A: IRR is the rate at which NPV of the project is zero.

Q: Example (1): You have the following data: Details 12/31/2020 1/1/2020 60000 80000 40000 150000 15000…

A: Closing Capital = Beginning Capital + Additional Capital invested - Capital withdrawn + Net Result

Q: QUESTION 2  REQUIRED Study the information given below which was made available by Levis Limited and…

A: NPV means present value of benefits arise in future during the life of the project. It can be…

Q: Solve it correctly. I will rate accordingly with 3votes. Solve by hand and excel.

A: Rate of Return: The rate of return represents the net loss or gain made over a period of an…

Q: 12. An investment requires working capital equal to 9% of the year’s sales revenue to be in place…

A:

Q: 4. An investment has the following cash flows. What is the ARR? Year 0 -90,000 Year 1 45,000 Year 2…

A: Year Cash Flows 0 -90,000 1 45,000 2 10,000 3 30,000 4 30,000

Q: 2. An investment has the following cash flows - what is the payback ? Question 2 -90,000 45,000…

A: Introduction Payback period: It is the method of capital investment evaluation. This method…

Q: Question 6 During 2019, Bitsincoins Corporation had EBIT of $100,000, a change in net fixed assets…

A: The free cash flow to the firm refers to the funds remaining in the hands of management after all…

Q: EXERCISE 1: COST OF CAPITAL A company wants to raise $50 million to finance the following capital…

A: To find the cost of capital, we will first need the weightage of each capital class. For that we…

Q: Q2: A sum of $ 10000 is borrowed by a refining oil company. Propose four different equivalent plans…

A: The time worth of cash draws from the possibility that judicious financial backers like to get cash…

Q: 3. An investment has the following cash flows. What is the ARR? Year 0 -120,000 30,000 40,000 60,000…

A: Cost of Investment : $120,000 Project Life : 5 Years Depreciation per year : $120,000 / 5 = $24,000…

Q: 3. 2. Year Cash Inflows $400,000 300,000 200,000 4 100,000 5. 200,000 What is the NPV of the…

A: Net Present Value is the difference between the current value of cash inflow and cash outflow for a…

Q: Question 3 The XYZ Company has the opportunity to invest in a new venture, which would have a…

A: Present value of annual cash flows…

Q: QUESTION 6 1) "Millie's Ice Cream" Company Limited has two (2) projects under consideration. The…

A: As per bartleby guidelines, "Since you have posted a question with multiple sub-parts, we will solve…

Q: 1. A manufacturing company wants to expand its product line. There are two investment projects which…

A: Equivalent annuity method calculates the constant annual cash flow the project will generate over…

Q: ased on an investors expectations of earning 12% should this project be completed with a cash flow…

A: Expectations of earning :- Analysts' and other experts' consensus estimate of a company's earnings…

Q: Ontario, Inc. establishes a 5% hurdle rate for its investment projects. The firm is considering…

A: Internal rate of return is the present value discounting rate at which the net present value i.e.…

Q: Problem 5. You have to determine an investment strategy for the next three years. At present (time…

A: We define the following decision variables. A: Dollar invested in investment A B: Dollar invested in…

Q: P 30,000 65,000 7,000 20,000 40,000 72,000 100,000 75,000 36,000 20,000 625,000 2,000 Accounts…

A: Here in this question, we are required to calculate working capital. Working capital means a capital…

Q: Problem 6. Justine Global Info Tech records the following cash flows at the end of each year for a…

A: Present value: It can be defined as today’s worth of an investment that will be received in the…

Q: 3. The company will invest $150,000 in a project and average annual income $50,000. The investment…

A: Formulas:

Q: Year Amount $20,000/yr. 35,000/yr. 1-5 6-10 Find the present value of cash flows, assuming that the…

A: Present value means current worth of future payments at an interest rate of 14%,

Q: Q4. Abbas Manufacturing firm uses discounted payback period to evaluate investments in capital…

A: Using excel for discounted payback period

Q: 2. 2.1 2.2 2.3 2.4 Getum Ltd is considering investing in project Zeta. The following details relate…

A: NPV is a technique under capital budgeting which help in decision making on the basis of future Cash…

Q: pose Hungry Whale Electronics is e estment of $2,225,000. The project Year Cash Flow Year 1 $350,000…

A: Note : As per the guidelines only first question will be answered.

Q: Calculate the EBIT, Depreciation, Changes in NWC, and net capital spending for the next four years.

A: EBIT (Earnings Before Interest and Tax) shows the profitability of a business. It indicates the…

Q: Last year, Industrial Industries had Operating Cash Flow of 125,000. It had Net Capital Spending of…

A: Free Cash Flow: It  represents  the cash stays  after  meeting  company's  operational cost   and…

Q: 2- Bell Manufacturing Inc. is considering the replacement of one of its old drill presses. Three…

A: On the basis of the Profitability index, the Project would be selected which have high profitability…

Q: Table C-1 Table C-2 Initial Investment 2677437 25% Year Revenue Cost Cash Flow Cost of Capital 0.…

A: NPV is the difference between present value of cash inflows and initial investment NPV =pv of all…

Q: The Riverside Company is evaluating two mutually exclusive assets: Black and White, at the end of…

A: The question is based on the concept of valuation model.

Q: 2. Compute the IRR for the investment represented by the following cash flow table: Year 0. 1 3 4 6.…

A: A discount rate at which the net present worth of an investment is equal to zero is term as an…

Q: Exercise 2 Masikap has an investment opportunity costing P180,000 that is expected to yield the…

A: Payback period is the time taken by the investment to recover the cost of the investment. The…

Q: 13.   An investment requires working capital equal to 15% of the year’s sales revenue to be in place…

A: Cash flow relating to working capital is calculated by taking difference between previous year sales…

Q: Problem No. 3 The cash flows for an investment are shown below: Year 1 3 4 Cash flow $1400 1500 1600…

A: The equivalent annual benefit (EUAB) is the annual benefit amount of a project.

Q: QUESTION 3 A company has the project cashflow presented in the table below. If the inflation-free…

A: Interest rate after inflation = Inflation free rate + Inflation   Present worth = Present value of…

Q: Investment at the end of year 2 3 4 5 6 7 Year Today 1 Cash Flow $100 +$200 +$300 +$400 +$500 +$600…

A: Initial investment (I) = $100 CF1 = $200 CF2 = $300 CF3 = $400 CF4 = $500 CF5 = $600 CF6 = $700 CF7…

Q: In a case that A firm's cost of capital is 12 percent. The firm has three investments to choose…

A: NPV is calculated using following formula.