Q: What is the profitability index? When is it used?
A: Capital investment analysis: Capital investment analysis is the process by which management plans,…
Q: From the data below, how much is the total passive income?
A: Passive income is generally an additional income apart from employment and business activity. In…
Q: What are the Profit margins?
A: Answer: Profit margin represents a product, company or sector profitability. It nothing but the…
Q: a) Find aggregate planned expenditure for each level of real GDP. b) What is the equilibrium level…
A:
Q: What is the marginal rate of return? How is it calculated?
A: Answer: Marginal rate of return can be defined as the return obtained or received by means of…
Q: how much was net income?
A: Net Income = Change in Retained Earnings + Dividend paid Retained Earnings in 2017 = Total…
Q: What are economic events?
A:
Q: How do I determine net income
A: Net Income/Loss earned during a particular period is computed by drawing the statement of Income for…
Q: WHAT IS THE TOTAL COMPREHENSIVE INCOME
A: Incomes routed through profit and loss are shown pretax and at the end the income tax is reduced…
Q: What is the internal rate of return?
A: Internal rate of return is the discount rate at which present value of cash inflows equals outflows…
Q: e average rate of return on investment,
A: Average rate of return of investment = Average net income * 100/(Initial investment-Salvage value)
Q: How to calculate the Profitability index?
A: Profitability Index: It is a measure used in capital budgeting of the project's or investment's…
Q: What are some economic conditions that affectthe cost of money?
A: The economic conditions that impact the cost of money as follows: Fiscal deficits: The variance…
Q: What is the equivalent total investment cost (future worth)?
A: Answer: Equivalent total investment cost (future worth) method discounted cash flow method converts…
Q: What would your annual net earnings be?
A: As per our policy, we only answer one question when many different questions are posted. The first…
Q: how do you calculate the net income
A: Revenues: Revenues are earnings from operations of a business. The operating activities are sale of…
Q: What is comprehensive income?
A: Definition: Comprehensive Income: When there is a change in the total stockholder's equity from all…
Q: what is profitability ratio?
A: Financial ratios provide information related to the company. There are various types of ratios like…
Q: Calculate the insurable earnings.
A: Answer:
Q: How much is net income?
A: Financial statements are the set of records of the financial transactions and position of a business…
Q: How do you turn an income statement int a forecasted return? And how is it helpful?
A: Return means earn additional on invested amount. Return is a positive factor in every investment.…
Q: Net income *?
A: Looking the bottom line of the income statement, net income = P650000
Q: What is the net income for both options assuming present worth method?
A: PRESENT WORTH OF BATCH Depreciation = (50,000 - 6000) / 5 = $8800 P{B} = -50,000 - (10,000) (P/A,…
Q: Discuss some financial variables that affect the price-earnings ratio?
A: The price-Earning Ratio refers to the ratio between earning per share and the current market price…
Q: What is payout period and how is it calculated?
A: Companies employ various methods in the process of selection of the most financially appropriate…
Q: What is the accounting rate of return?
A:
Q: What are the different terms used to refer to the rate of return?
A: Rate of return is an expected profit on an investment by a investor. It is a rate at which investor…
Q: What is the median income?
A: Income distribution specifies how the countries income or GDP is distributed among the population.…
Q: What are the advantages and disadvantages of thesingle-step income statement?
A: Income Statement: Income Statement is the part of the financial statement which is prepared to…
Q: What are the measures of investment worth based on yield? What are they called?
A: Investment worth based on yield means that an investor is expecting certain income on an investment…
Q: What is Profitability analysis?
A: Profitability analysis is an important measure for the business to analyze the company's ability in…
Q: What is income approach measurement?
A: Step 1 The income approach is a real estate valuation tool that determines fair market value based…
Q: Net income will be:
A: Net income can be calculated by using the following formula:
Q: Describe the method of developing a Present Worth Distribution?
A: Present value or Present Worth of an investment or a project is the value of future cash flow…
Q: what is the difference between a required rate of return and an expected rate of return?
A: Rate of return (ROR) is a value at which an investor earns additional amount on invested amount…
Q: What is meant by investment yields?
A: Investment Yield: It defined as Earnings or income which is earned on investment over the period of…
Q: What is market Value added? What is economic value added? What is the difference between what each…
A: Market value added is the amount of wealth that the company is able to create for its stakeholders.…
Q: Define net income.
A: Definition: Earnings: The bottom line of an income statement which is the result of excess…
Q: Do you use an income-statement strategy?
A: The income statement is one of three financial statements of an entity.(The others are the balance…
Q: What tax rate should be used in calculating the taxes on the investment's projected income?
A: Investment: It refers to the process of using the currently held excess cash to earn profitable…
Q: how to compute the percentage change in working capital?
A: Working capital is the capital which is used to operate the day to day business operations like,…
Q: what is net income ?
A: Net income is the profit after tax where the profit is the net profit after interest and…
Q: economic entitiy assumption
A: Accounting Assumptions: Accounting professionals are guided by the accounting…
Q: what is earning forecasting?
A: The act or process of using certain data to predict future earnings of a publicly-traded company.…
Q: What is the Profitability Index?
A: Capital budgeting is the technique of evaluating a project which requires an initial capital…
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- Problem 9-9 Calculating Project OCF [LO 2] Esfandairi Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2,950,000. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $3,190,000 in annual sales, with costs of $2,210,000. If the tax rate is 21 percent, what is the OCF for this project?Chapter 4 Exercise Pg.170 Question 2Perform a financial analysis for a project using the format provided in Figure 4-5. Assume the projected costs and benefits for this project are spread over four years as follows: Estimated costs are $200,000 in year 1 and $30,000 each year in years 2, 3, and 4. Estimated benefits are $0 in year 1 and $100,000 each year in years 2, 3, and 4. Use a 9 percent discount rate and round the discount factors to two decimal places. Create a spreadsheet (or use the business case financials template provided on the companion Web site) to calculate and clearly display the NPV, ROI, and year in which payback occurs. In addition, write a paragraph explaining whether you would recommend investing in this project, based on your financial.Problem 8-12 Profitability Index (LO5) What is the profitability index of a project that costs $10,000 and provides cash flows of $3,000 in years 1 and 2 and $5,000 in years 3 and 4? The discount rate is 10%.
- aj.7 Steve's Stoves Company, which desires a minimum rate of return on its investment projects of 15%, has two proposals under consideration. Their costs and expected cash flows are: A B Initial Investment $96,000 $132,000 Expected after-tax cash flows: Year 1 $40,000 $52,000 Year 2 $32,000 $56,000 Year 3 $48,000 $40,000 Year 4 $24,000 $32,000 In addition, proposal B has an expected cash salvage value at the end of four years of $8,000. The present value of $1 due in 1, 2, 3, and 4 years at 15% is .86957, .75614, .65752, and .57175, respectively.Using the profitability index method, determine which project, if either, should be accepted by the company.Problem 8-14 Problems with Profitability Index [LO 4, 6] The Michner Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (I) Cash Flow (II) 0 −$ 82,000 −$ 40,000 1 32,000 13,200 2 42,000 29,500 3 48,000 22,500 a-1. If the required return is 15 percent, what is the profitability index for each project? Note: Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161. a-2. If the company applies the profitability index decision rule, which project should it take? b-1. If the required return is 15 percent, what is the NPV for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b-2. If the company applies the net present value decision rule, which project should it take?J 9 Your firm is considering an expansion project that requires a fixed asset investment of $2.5 million and an initial investment in net working capital of $300,000. Net working capital will increase by 10% each year until it is recaptured at the end of the project. The fixed asset will be depreciated straight-line to zero over the 3-year project, but is estimated to have a market value of $210,000 at the end of year 3. The firm’s tax rate is 21%. Expected operating cash flows for the 3-year life of the project are: $1,150,000 at the end of the first year, $1,175,500 at the end of the second year, and $985,500 at the end of the third year. What is the project NPV at a 12% required return?
- QUESTION 32 Advanced Products is considering the purchase of a computer-aided manufacturing system that requires an initial investment of $1,750,000 and is expected to provide and is expected to provide an increase in net income of $200,000 and average annual cash benefits and savings of $250,000 each year for the next 10 years. Their current cost of capital is 10%. Following are selected factors from tables for 10 years at 10%: FV of $1 FVOA PV of $1 PVOA 2.59374 15.93742 0.38554 6.14457 Required: What is the present value of the cash outflows/Investment $1,750,000 $963,850 $(963,850) $(1,750,000)A3 8av You are considering a new product launch. The project will cost $680,000, have a four-year life, and have no salvage value; depreciation is straight-line to zero. Sales are projected at 100 units per year, price per unit will be $19,000, variable cost per unit will be $14,000, and fixed costs will be $150,000 per year. The required return on the project is 15%, and the relevant tax rate is 35%. Ignore the half-year rule for accounting for depreciation. a. Calculate the following six numbers for this project. Round your answers to two decimal places. (v) Internal Rate of Return (IRR in %)Problem 10-13 Calculating Project OCF (L03) Hubrey Home Inc. is considering a new three - year expansion project that requires an initial fixed asset investment of $41 million. The fixed asset falls into Class 10 for tax purposes (CCA rate of 30% per year), and at the end of the three years can be sold for a salvage value equal to its UCC The project is estimated to generate $ 2,670,000 in annual sales, with costs of $846,000. If the tax rate is 35% what is the OCF for each year of this project? (Enter the answers in dollars. Do not round your intermediate calculations. Round the final answers to 2 decimal places. Omit S sign in your response.) OCH OCF2 OCT
- Problem 8-18 Crossover Point [LO 3] Crenshaw Enterprises has gathered projected cash flows for two projects. Year Project I Project J 0 −$ 267,000 −$ 267,000 1 113,300 95,200 2 106,400 100,700 3 90,400 102,700 4 79,400 109,700 At what interest rate would the company be indifferent between the two projects? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Which project is better if the required return is above this interest rate?QUESTION 34 Advanced Products is considering the purchase of a computer-aided manufacturing system that requires an initial investment of $1,750,000 and is expected to provide an increase in net income of $200,000 and average annual cash benefits and savings of $250,000 each year for the next 10 years. Their current cost of capital is 10%. Following are selected factors from tables for 10 years at 10%: FV of $1 FVOA PV of $1 PVOA 2.59374 15.93742 0.38554 6.14457 Required: Compute the net present value of the investment $0 $750,000 $(213,857.50) $1,000,000Problem 25-2A Analysis and computation of payback period, accounting rate of return, and net present value LO P1, P2, P3 [The following information applies to the questions displayed below.] Most Company has an opportunity to invest in one of two new projects. Project Y requires a $320,000 investment for new machinery with a five-year life and no salvage value. Project Z requires a $320,000 investment for new machinery with a four-year life and no salvage value. The two projects yield the following predicted annual results. The company uses straight-line depreciation, and cash flows occur evenly throughout each year. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Project Y Project Z Sales $ 385,000 $ 308,000 Expenses Direct materials 53,900 38,500 Direct labor 77,000 46,200 Overhead including depreciation 138,600 138,600 Selling and administrative…