The management of Kawneer North America is considering investing in a new facility and the following cash flows are expected to result from the investment: Year Cash Outflow Cash Inflow $1,895,000 $100,000 545,000 200,000 360,000 485,000 515,000 595,000 595,000 300,000 245,000 245,000 A. What is the payback period of this uneven cash flow? Round your answer to 2 decimal places. X years 1 2 3 4 5 6 7 8 9 10 B. Does your answer change if year 10's cash inflow changes to $500,000? The answer for part A if the cash inflow in year 10 changes to $500,000.

The management of Kawneer North America is considering investing in a new facility and the following cash flows are expected to result from the investment: Year Cash Outflow Cash Inflow $1,895,000 $100,000 545,000 200,000 360,000 485,000 515,000 595,000 595,000 300,000 245,000 245,000 A. What is the payback period of this uneven cash flow? Round your answer to 2 decimal places. X years 1 2 3 4 5 6 7 8 9 10 B. Does your answer change if year 10's cash inflow changes to $500,000? The answer for part A if the cash inflow in year 10 changes to $500,000.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A3 5c. 5. We have two independent and mutually exclusive projects, A and B. Project A requires an initial investment of $1500, and will yield $800 of cash inflows for the next three years. Project B requires an initial investment of $5000, and will yield $1,500 of cash inflows for the next five years. The required return on each project is 10%. c. Which project should be chosen?
FNCE 623 – Financial Management Individual assignment Belgravia Petroleum Inc. is trying to evaluate a generation project with the following cash flows: Year Cashflow 0 -$300,000,000 1 $63,000,000 2 $85,000,000 3 -$50,000,000 4 $145,000,000 5 $175,000,000 6 -$50,000,000 7 $70,000,000 8 $72,000,000 Construct a spreadsheet and calculate the following (the required rate of return is 12%): Payback period Discounted payback period Modified IRR The discounting approach The reinvestment approach The combination approach Net present value (NPV) Based on your analysis, should the company take the project? Why? IMPORTANT: Use MS Excel functions (PV, FV, NPV, and IRR) in your spreads please show answer the answer on Excel and full description on Excel sheet
6 dates cash flows 12/10/2022 -$12,000.00 4/10/2023 $4,000.00 10/2023 $4,000.00 12/10/2023 $4,000.00 4/10/2024 $4,000.00 Your venture has signed a new consulting contract that will require you to invest in new analytical software and a new computer. The contract will generate the cash flows at specific times. You decision rule is to only accept projects that have an internal rate of return that exceeds 40%. This project should be accepted. True False
Sh.23. ABC company is considering investing in Project Zeta or Project Omega. Project Zeta generates the following cash flows: year “zero” = 321 dollars (outflow); year 1 = 160 dollars (inflow); year 2 = 294 dollars (inflow); year 3 = 386 dollars (inflow); year 4 = 147 dollars (inflow). Project Omega generates the following cash flows: year “zero” = 230 dollars (outflow); year 1 = 120 dollars (inflow); year 2 = 100 dollars (inflow); year 3 = 200 dollars (inflow); year 4 = 120 dollars (inflow). The MARR is 10 %. Using the Present Worth Method, calculate the Net Present Value of the BEST project. (note: round your answer to the nearest cent, and do not include spaces, currency signs, plus or minus signs, or commas)
Exercise 14-1 (Algo) Payback Method [LO14-1] The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year Investment Cash Inflow 1 $ 60,000 $ 4,000 2 $ 3,000 $ 8,000 3 $ 16,000 4 $ 17,000 5 $ 20,000 6 $ 18,000 7 $ 16,000 8 $ 14,000 9 $ 13,000 10 $ 13,000 Required: 1. Determine the payback period of the investment. 2. Would the payback period be affected if the cash inflow in the last year were several times as large?
Ch 25 pro 8 Please provide instructions. Cash Payback Period, Net Present Value Analysis, and Qualitative Considerations The plant manager of Shannon Electronics Company is considering the purchase of new automated assembly equipment. The new equipment will cost $48,000. The manager believes that the new investment will result in direct labor savings of $16,000 per year for 10 years. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 a. What is the payback period on this project? years b. What is the net present value, assuming a 10% rate of return? Use the table provided above. Round to the nearest whole dollar.…
Problem 8-30 NPV and IRR [LO 3, 4] Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash Flow 0 −$ 580,000 1 210,000 2 153,000 3 218,000 4 197,000 All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are “blocked” and must be reinvested with the government for one year. The reinvestment rate for these funds is 5 percent. Assume Anderson uses a required return of 11 percent on this project. What is the NPV of the project? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. What is the IRR of the project? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Ch 5. The 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? Round to one place past the decimal point and format as "XX.X"
A3 5b 5. We have two independent and mutually exclusive projects, A and B. Project A requires an initial investment of $1500, and will yield $800 of cash inflows for the next three years. Project B requires an initial investment of $5000, and will yield $1,500 of cash inflows for the next five years. The required return on each project is 10%. b. What is the problem with using the NPV investment criterion in this case? What alternative criterion should be used?
ch 12 #5 The management of Kunkel Company Is considering the purchase of a $26,000 machine that would reduce operating costs by $6500 per year. At the end of the machines five-year useful life, it will have zero salvage value. The companies required rate of return is 16%. 1) determine the net present value of the investment on the machine. 2) what is the difference between the total, undiscounted cash inflows and cash out flows over the entire life of the machine? Can you show me how to do this? Also, i don’t know which chart I’m supposed to use.
Ch 25 Pro 4 Please give me instruction to figure the answer Cash Payback Method Lily Products Company is considering an investment in one of two new product lines. The investment required for either product line is $540,000. The net cash flows associated with each product are as follows: Year Liquid Soap Body Lotion 1 $170,000 $ 90,000 2 150,000 90,000 3 120,000 90,000 4 100,000 90,000 5 70,000 90,000 6 40,000 90,000 7 40,000 90,000 8 30,000 90,000 Total $720,000 $720,000 a. Recommend a product offering to Lily Products Company, based on the cash payback period for each product line. ________________ Payback period for liquid soap ________________________ Payback period for body lotion _________________________ b. The project with the ___________ net cash flows in the early years of the project life will be favored over the one with the __________ net cash flows in…
Exhibit 9-2The following data are projected for a possible investment project: 1 2 3 4 Revenues $130,000 $150,000 $170,000 $190,000 Cost of Goods Sold $ 32,000 $ 38,000 $ 44,000 $ 50,000 Depreciation $ 70,000 $ 50,000 $ 30,000 $ 10,000 EBIT $ 28,000 $ 62,000 $ 96,000 $130,000 Refer to Exhibit 9-2. The project requires an initial investment of $340,000. Working capital is anticipated to be variable at 13% of revenues; the working capital investment must be made at the beginning of each period, and will be recaptured in full at the end of year 4. The tax rate is 38%.What is the initial cash outlay? Group of answer choices $356,900 $276,900 $264,900 $344,900

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