Which of the five project net cashflows presented in the table below would be considered a Conventional cashflow?Note: This is a Multiple Answer question. Please select all of the following options you think are correct?Year 1Year 2Year 3Year 4Year 5Year 6Year 7Project 1-50,00030,00015,0005,0003,0007,00013,000Project 2-50,000-10,00050,00070,0003,000-2,000-5,000Project 3-100,000-20,00050,00080,000120,000Project 4-70,000-30,00020,00070,000-10,0005,00020,000Project 5-80,000-40,000-35,00023,00047,00043,00019,000O Project 4O Project 2O Project 5Project 1Project 3

Conventional Cashflow is a series of cashflows which have only one sign change throughout the…

Which of the Note: This is a Multiple Answer question. Please select all of the following options you think are correct? 111111 Year 5 Year 6 Year 7 Year 1 Year 2 Year 3 Year 4 15,000 5,000 3,000 7,000 13,000 -50,000 30,000 Project 1 -2,000 -5,000 -10,000 50,000 70,000 3,000 Project 2 -50,000 -20,000 50,000 80,000 120,000 Project 3 -100,000 5,000 20,000 -30,000 20,000 70,000 -10,000 Project 4 -70,000 19,000 -35,000 23,000 47,000 43,000 Project 5 -80,000 -40,000 O Project 4 O Project 2 O Project 5 O Project 1 Project 3

Which of the Note: This is a Multiple Answer question. Please select all of the following options you think are correct? 111111 Year 5 Year 6 Year 7 Year 1 Year 2 Year 3 Year 4 15,000 5,000 3,000 7,000 13,000 -50,000 30,000 Project 1 -2,000 -5,000 -10,000 50,000 70,000 3,000 Project 2 -50,000 -20,000 50,000 80,000 120,000 Project 3 -100,000 5,000 20,000 -30,000 20,000 70,000 -10,000 Project 4 -70,000 19,000 -35,000 23,000 47,000 43,000 Project 5 -80,000 -40,000 O Project 4 O Project 2 O Project 5 O Project 1 Project 3

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 3E

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MARR = 8%. Your consultancy business signs on with a new client. The client pays you $5000 up front as deposit toward future work. One year later the client makes another payment of $5000. The year after that you invest $16,000 into the project. The following year, in the third year, the client pays you the remaining balance of $5388. The project's precise ERR is within 0.5% of a) 12% b) 13% c) 4% d) 15% e) None of the above
Given the following cash flows for project X and project Y, Year Project X Project Y 0 -55000 -100000 1 20000 15000 2 13500 17000 3 11000 19000 4 10000 25000 5 9000 30000 6 7500 35000 Calculate the NPV, IRR, MIRR and traditional payback period for each project, assuming a required rate of return of 7 percent If the projects are independent, which project(s) should be selected? If they are mutually exclusive, which project should be selected?
Problem 1 (What is the solution for this?) A corporation sold an issue of 20-year bonds, having a total face value of 10,000,000 Php for 9,500,000 Php. The bonds bear interest at 16%, payable semiannually. The company wishes to establish a sinking fund for retiring the bond issue and will make semiannual deposits that will earn 12%, compounded semiannually. Compute the annual cost for interest and redemption of these bonds. Ans should be: 1,730,000
Use the following cash flows to find the NPW, IRR, PI, and PBPYou are looking at a new project and you have estimated the followingcash flows:◦ Year 0: CF = -165,000◦ Year 1: CF = 63,120;◦ Year 2: CF = 70,800;◦ Year 3: CF = 91,080;Your required return for assets of this risk is 12%
Part 1Please calculate the payback period, IRR, MIRR, NPV, and PI for the following two mutuallyexclusive projects. The required rate of return is 15% and the target payback is 4 years.Explain which project is preferable under each of the four capital budgeting methodsmentioned above: Cash flows for two mutually exclusive projects Year Investment A Investment B 0 -$5,000,000 -5,000,000 1 $1,500,000 $1,250,000 2 $1,500,000 $1,250,000 3 $1,500,000 $1,250,000 4 $1,500,000 $1,250,000 5 $1,500,000 $1,250,000 6 $1,500,000 $1,250,000 7 $2,000,000 $1,250,000 8 0 $1,600,000 Part 2 Please study the following capital budgeting project and then provide explanations for thequestions outlined below:You have been hired as a consultant for Pristine Urban-Tech Zither, Inc. (PUTZ),manufacturers of fine zithers. The market for zithers is growing quickly. The company bought some land three years ago for $2.1 million in…
Two married couples of investors are analyzing a project where they acquired the following figures: initial investment $310,000 annual net profit of $130,000 each year for five years; salvage value of assets at the end of the fifth year $160,000. The money contributions for the initial investment were shareholders: 60% MARR 43%, bank A 20%, interest charged by the bank 45%; bank B 20% of the investment and an interest rate for the loan of 49%. Calculate the mixed MARR and determine the economic convenience of the investment by the NPV
Net present value (NPV) of the project =Single payoff x PVIAF (10.20%, 9 years) - initial outlay = $6,947 x 0.42340 - $2,182 = $759.39 What's the equation for the bolded item?
1 - Assuming an interest rate of 3% per year (effective), calculate the feasibility of each option. You can use either Present Worth Analysis or Equivalent Uniform Worth Analysis. In this part, your calculation should be done without the use of Excel. Show your equations and the results. 2 - Using linear interpolation, calculate the rate of return for each option. Here, your calculation should be implemented using Excel. 3 - Assuming that the initial equipment can be depreciated over the course of 20 years and usingDouble Decline Balance Depreciation, calculate the depreciation schedule for the equipment. 4- Assume a state income tax of 5%. Calculate the after-tax cashflow for each option assuming the depreciation used. Use only the depreciation on question 2.
Solo Corporation is evaluating a project with the following cash flows: Year 0,1, 2, 3, 4, 5 Cash Flow $ -29,600;  11,800;  14,500 ; 16,400;  13,500 and -10,000. The company uses an interest rate of 10 percent on all of its projects. Calculate the MIRR of the project using all three methods. a. MIRR using the discounting approach. b. MIRR using the reinvestment approach. c. MIRR using the combination approach.
Give typing answer with explanation and conclusion A small company purchased now for $120,000 will lose $300 each year for the first four years. An additional $600 in the company in the fourth year will result in a profit of $9500 each year from the fifth through the twelfth year. At the end of 12 years, the company can be sold for $135,000. a) Draw the cash flow diagram b) Determine the IRR for this project. c) Calculate the FW if MARR is 5%. d) Calculate the ERR when ε = 7%.
A colleague of yours is planning to start a small, plastic components manufacturing business. He has invited you to be a partner. Best estimates for the total depreciable capital for equipment is $500,000. Expected sales amount to $250,000 annually and total manufacturing costs without depreciation was estimated to be about $96,500 yearly. If equipment can be purchased and installed in one year and the project has a ten year life, perform a complete discounted cash flow analysis and make a decision if you should invest or not. Assume straight-line depreciation for ten years at which point the equipment salvage value will be zero. Also assume that you can invest at 10% interest in other opportunitites for comparison
On February 1, 2024, Sanyal Motor Products issued 6% bonds, dated February 1, with a face amount of $65 million. The bonds mature on January 31, 2028 (four years). • The market yield for bonds of similar risk and maturity was 8%. • Interest is paid semiannually on July 31 and January 31. • Barnwell Industries acquired $65,000 of the bonds as a long-term investment. • The fiscal years of both firms end December 31. Required: 1. Determine the price of the bonds issued on February 1, 2024. 2-a. Prepare amortization schedules that indicate Sanyal's effective interest expense for each interest period during the term to maturity. 2-b. Prepare amortization schedules that indicate Barnwell's effective interest revenue for each interest period during the term to maturity. 3. Prepare the journal entries to record the issuance of the bonds by Sanyal and Barnwell's investment on February 1, 2024. 4. Prepare the journal entries by both firms to record all events related to the bonds…