What is the equivalent annual cost for a project that requires a $50,000 investment at time-period zero, and a $10,000  annual expense during each of the next 4 years, if the opportunity cost of capital is 10%?

Q: If a project costs $120,000 and is expected toreturn $40,000 annually, how long does it take…

A:

Q: Suppose a project costs $300 and produces cash flows of $100 over each of the following six years.…

A: Given:   Project Cost 300 Annual Cash inflows 100 Time-period of cash inflows in years 6…

Q: Calculate the internal rate of return for a project that requires $100,000 initial investment and…

A: Internal Rate of Return is a capital budgeting technique used to evaluate the viability of the…

Q: Project L costs $40,000, its expected cash inflows are $9,000 per year for 8 years, and its WACC is…

A: Modified internal rate of return (MIRR) is the rate of return provided by the project. In this…

Q: What is the NPV of the project if the required return is 12% APR compounded annually?

A: Net Present Value: It is estimated by the difference between the discounted cash inflows and the…

Q: Project L costs $40,000, its expected cash inflows are $12,000 per year for 11 years, and its WACC…

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

Q: Project L costs $50,000, its expected cash inflows are $8,000 per year for 7 years, and its WACC is…

A: Project's Payback Period = Initial Investment / Expected annual cash inflows

Q: Project L costs $70,000, its expected cash inflows are $12,000 per year for 8 years, and its WACC is…

A: Project's MIRR is calculated using excel MIRR function

Q: What is the IRR of a project that costs $1,000 now and produces $900 next year and $900 the year…

A: IRR is the rate of return a project generates in its lifetime expressed in annual terms. IRR is…

Q: What is the IRR of a project that costs $1,000 now and produces $600 next year and $600 the year…

A: IRR usage is done for doing a project analysis. It is further helpful to decide the capital projects…

Q: What is the interest earned on a project that requires an initial investment of $ 10,000 and…

A: Initial investment (PV) = $ 10,000 Future value (FV) = $ 20,114 Period (n) = 5 Years

Q: Cooper Industries is considering a project that would require an initial investment of P235,000. The…

A: Discount factor = initial investment / Annual cost savings = P235,000/P70,110  = 3.352

Q: A project with a useful life of eight years requires an investment of $200,000 and yields after tax…

A: Income after tax = $ 30,000 Investment = $ 200,000

Q: project requires an initial investment of P300,000 on equipment. The project will generate sales…

A: Salvage value of equipment 0 as it will be sold at book value that is 300000, so no depreciation…

Q: Project L costs $40,000, its expected cash inflows are $12,000 per year for 7 years, and its WACC is…

A: Payback period is the amount of time taken by the project to recover its initial cash invested.…

Q: Calculate the present value of $89,000 to be received in 15 years, assuming an opportunity cost of…

A: Present value is defined as the present discounted value in which an expected income stream value…

Q: Assume the following facts:• A project will cost $45,000 to develop.• When the system becomes…

A: Computation:

Q: Project L costs $54,050.02, its expected cash inflows are $12,000 per year for 9 years, and its WACC…

A: Formulas:

Q: A project has an initial cost of $40,000, expected net cash inflows of $9,000 per year for 7 years,…

A: The Internal rate of return is one of the capital budgeting method under which the projects are…

Q: What is the profitability index of a project that costs $87 and returns $42 annually for 8 years if…

A: Introduction Profitability Index As the word states, PI(Profitability index measures the ratio…

Q: A project has cost $50,000. The project is scheduled to complete three months from now and is…

A: Sunk cost is a cost which has already being incurred and cannot be recovered. For a continuing…

Q: A project will cost $10,000 up front and $1,000 each year thereafter. The project will bring in…

A: Breakeven point refers to the point at which total cost equals total revenue. The payback period is…

Q: What is the NPV of a project that costs $188,000 today and is expected to generate monthly cash…

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

Q: What is the internal rate of return (IRR) of a project that costs $20,070 if it is expected to…

A: Internal rate of return is the return at which the present value of the project is zero. In other…

Q: What is the NPV of a project with an initial investment of $100, a cash flow in one year of $105,…

A: Net present value is the technique used in capital budgeting to evaluate the acceptability of the…

Q: What is the IRR of a project that requires an initial investment of $6000 and it will generate…

A:

Q: Project L costs $65,000, its expected cash inflows are $11,000 per year for 7 years, and its WACC is…

A: Computation of the payback period:

Q: What is the IRR of a project that costs $1,000 now and produces $500 next year and $500 the year…

A: Working note:

Q: Suppose we are considering a capital investment that costs $686,400 and provides annual operating…

A: Net Present value (NPV) is defined as the present value of future cash flows less initial…

Q: A project has an initial cost of $40,000, expected net cash inflows of $9,000per year for 7 years,…

A: NPV abbreviated as Net Present Value is the difference between the present value of cash inflows and…

Q: A project has an initial outlay of $2,182. It has a single payoff at the end of year 9 of $6,947.…

A: Net present value (NPV) of the project = Present value of single payoff at the end of year 9 -…

Q: Project L costs $70,000, its expected cash inflows are $11,000 per year for 8 years, and its WACC is…

A: Using excel MIRR function

Q: What is the IRR of a project that costs $1,000 now and produces $1,000 next year?

A: Given information: Initial cash flow is $1,000 Cash flow in first year is $1,000

Q: What is the IRR of a project that involves an initial expenditure of $100,000 but results in a…

A: Initial expenditure (Present Value) $1,00,000 Return After 10 years (Future Value) $2,00,000…

Q: The expected profits from a $165,000 investment are $55,000 in Year 1, $80,000 in Year 2, and…

A: Year Cash flows 0 -165000 1 55000 2 80000 3 120000

Q: What is the NPV of the project if the required return is 12% APR compounded annually?

A: Net Present Value: It is a measure of absolute profitability for the investment and this method is…

Q: A project that provides annual cash flows of $16,300 for eight years costs $69,000 today. What is…

A: NPV is the present value of future cash flow with respect to the time value of money. “Since you…

Q: A project is expected to cost $30,000, with the capital due immediately. Four annual cash flows are…

A: Capital budgeting techniques are quantitative approaches that a company adopts while evaluating…

Q: A project requires a $3 million investment in net working capital (NWC) today, and will be fully…

A: As per the given information: Investment in net working capital (NWC) - $3 million Recovered fully…

Q: Project L costs $45,000, its expected cash inflows are $15,000 per year for 11 years, and its WACC…

A: The payback period refers to the time required by an investment to cover its initial investment.…

Q: A project is offered which requires an outlay of £10,000.  Returns at the end of years 1, 2 and 3…

A: Net Present Value(NPV) is amongst one of the modern techniques of capital budgeting which considers…

Q: Terra Landscape is evaluating a capital budgeting project that is expected to generate $80, 100 per…

A: Present Value of annuity refers to the present value of all the future payments of and series of…

Q: A project requires an initial investment of $10,000 and returns benefits of $3000 at the end of…

A: The annual worth is the net of all the benefits and costs incurred over a one-year period. This…

Q: A project has an initial cost of $40,000, expected net cash inflows of $9,000 per year for 8 years,…

A:

Q: The project’s payback is 1.5 years, and it has a weighted average cost of capital of 10 percent.…

A: WACC = 10% Year Cash Flow 0   1                                    400 2…

Q: What would be the rate of return (IRR) on a project that had an  initial cost of $100,000 today and…

A: Cash flows are the cash generated from the operation of the business organisation. In other words,…

Q: Suppose that a project has an immediate cost of $10 million and running costs of $1 million per year…

A: A. NPV = Cash inflow- Cash outflow Cash outflow= $ 10 million Cash inflow= Net profit/ interest rate…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.