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- 4. A business generates an annual income of$50,000and a salvage value of$500,000in 10 years. How much would you pay for this to havei=10%? 5. Determine IRR in problem 4 if you pay$490,000for the business. (percentage format) Answer ASAP with proper explanation .Cost component Alpha Beta Charlie development 100,000 immediately 150,000 year 1 10,000 immediately None Programming 45,000 immediately 35,000 year 1 45,000 immediately 30,000 year 1 None Operations 50,000 1-10 80,000 years 1-10 150,000 years 1-10 support 30,000 1-10 40,000 years 1-10 none If each system is expected to have a 10-year life, 1. calculate the net present value for each system if the cost of capital is 8%. 2. Specify which system should be selected and whyCalculation question: Suppose the following data accurately estimates the costs and benefits you outlined in #1. Calculate NPV assuming a discount rate of 4%. Should ISU invest in this project? Year Costs Benefits 0 1000 400 1 200 500 2 200 500 3 200 500
- INR Ltd’s earnings per share next year is expected to be $2.10 and this is expected to grow at5% p.a. for the foreseeable future. Its required rate of return on equity has been estimated at 9%p.a. INR Ltd has a policy of reinvesting 40% of its earnings. The present value of INR Ltd’sgrowth opportunities is closest to: A. $7.78.B. $8.17.C. $11.11.D. $12.115-4 Solar Panel Installation A university spent $1.8 million to install solar panels atop a parking garage. These panels will have a capacity of 500 kW, have a life expectancy of 20 years and suppose the discount rate is 10%. a. If electricity can be purchased for costs of $0.10 per kWh, how many hours per year will the solar panels have to operate to make this project break even? b. If efficient systems operate for 2,400 hours per year, would the project break even? c. The university is seeking a grant to cover capital costs. How big of a grant would make this project worthwhile (to the university)?It’s time to get a new laptop that is $2500. If you finance it, you will be charged 8% annual interest and it will take you two years to pay it off, paying each month. (A)How much will you pay each month for this laptop? (B)What are your total acquisition costs of financing the laptop?
- Consider the following cash flows: Cash Flows ($) C0 C1 C2-8, 750 6,500 22, 000 Calculate the net present value of the above project for discount rates of 0, 50, and 100%. What is the IRR of the project?Suppose that the cost of an investment is €12000 and its return is €5000 per year for three years. At the end of the three years, the value of the equipment is zero. Calculate the net present value (NPV) if the discount rate is 5%. Give only a numerical answer with no symbols. Use a point (.) as a decimal separator and nothing as a thousand separator (e.g., 2325.37 and not 2.325, 37).9_relations among projects that cover all possibilities could be: Select one:a. independentb. mutually exclusivec. related and not mutually exclusived. all of the above 10_The amount you have to deposit in order to get $600 in the next 9 years at i=16% is: Select one:a. $4050b. $2527c. $3145d. $2763,9 Solve both please otherwise skip, I know bartleby policy 1 st 3 mcq solve compulsory.
- You have been asked by the chief financial officer of your company to estimate what thecompany’s share price will be at the end of four years from today. Your company has recentlypaid a dividend of $1.00 which is expected to grow at 5% p.a. over the foreseeable future. Ifthe company’s required rate of return on equity is 10% your price estimate at the end of year 4will be closest to: A. $20.00.B. $21.00.C. $24.30.D. $25.50.What is the discount factor after 3 years if the discount rate is 6% Question 4Answer a. 1.1 b. 0.84 c. 0.60 d. 0.79A businessman is considering the purchase of a machine that is expected to be obsolete in 5years. The machine is worthP100,000. The prevailing rate of interest is 15%. His estimate of the annual gross incomes fromthe use of the machine isas follows:Year Income1 20,0002 25,0003 35,0004 30,0005 28,000Total = P138 999Should the businessman purchase the machine?