Year 0 -20,000 Project 1 Project 2 Project 3 Project 4 Project 5 -20,000 -20,000 -20,000 -20,000 Year 1 4000 5000 2000 2000 5000 Year 2 3000 4000 3000 5000 5000 Year 3 2000 12,000 4000 9000 5000
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Hi there,
I am working on this problem. Can you please show me each step in solving this question without using excel? I am trying to figure out how to calculate the payback period for each project and also how do I calculate the IRR for each project?
Riley Ltd. has the following 5 investment projects to choose from, the company needs to select one project.
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- PROJECT A PROJECT BInitial Outlay -60,000 -80,000Inflow year 1 17,000 18,000Inflow year 2 17,000 18,000Inflow year 3 17,000 18,000Inflow year 4 17,000 18,000Inflow year 5 17,000 18,000Inflow year 6 17,000 18,000Ch 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"A4 9b A4 9a We find the following information on NPNG (No-Pain-No-Gain) Inc.: EBIT = $2,000,000Depreciation = $250,000Change in net working capital = $100,000Net capital spending = $300,000 These numbers are projected to increase at the following supernormal rates for the next three years, and 5% after the third year for the foreseeable future: EBIT: 20%Depreciation: 10%Change in net working capital: 15%Net capital spending: 10% The firm’s tax rate is 35%, and it has 1,000,000 outstanding shares and $8,000,000 in debt. We have estimated the WACC to be 15%. b. Calculate the CFA* for each of the next four years, using the formula CFA* = EBIT(1 – T) + Depr – ΔNWC – NCS.
- Question Content Area A project is estimated to cost $273,840 and provide annual net cash inflows of $60,000 for 7 years. Year 6% 10% 12% 1 0.943 0.909 0.893 2 1.833 1.736 1.690 3 2.673 2.487 2.402 4 3.465 3.170 3.037 5 4.212 3.791 3.605 6 4.917 4.355 4.111 7 5.582 4.868 4.564 8 6.210 5.335 4.968 9 6.802 5.759 5.328 10 7.360 6.145 5.650 Determine the internal rate of return for this project by using the above present value of an annuity table.fill in the blank 1 of 1%The project's NPV? WACC: 10.00% Year 0 1 2 3 Cash flows -$1,000 $450 $460 $470QUESTION 5Read the information below and answer the following questionsINFORMATIONThe management of Mastiff Enterprises has a choice between two projects viz. Project Cos and Project Tan, each ofwhich requires an initial investment of R2 500 000. The following information is presented to you:PROJECT COS PROJECT TANNet Profit Net ProfitYear R R1 130 000 80 0002 130 000 180 0003 130 000 120 0004 130 000 220 0005 130 000 50 000A scrap value of R100 000 is expected for Project Tan only. The required rate of return is 15%. Depreciation is calculated using the straight-line method.5.4 Benefit Cost Ratio of Project Cos (expressed to three decimal places). 5.5 Internal Rate of Return of Project Cos (expressed to two decimal places) USING INTERPOLATION.
- Question 21 The following information relates to three possible capital expenditure projects. Because of capital rationing only one project can be accepted. Project: A B C . Initial cost R100 000 R115 000 R90 000 Expected life 5 years 5 years 4 years Scrap value R5 000 R7 500 R4 000 Cash-inflows R R R End year 1 40 000 50 000 27 500 2 35 000 35 000 32 500…Question 16 The following information relates to three possible capital expenditure projects. Because of capital rationing only one project can be accepted. Project: A B C . Initial cost R100 000 R115 000 R90 000 Expected life 5 years 5 years 4 years Scrap value R5 000 R7 500 R4 000 Cash-inflows R R R End year 1 40 000 50 000 27 500 2 35 000 35 000 32 500…Ch 5. ABC Company has the following mutually exclusive projects. Year Project A Project B 0 -$19,520 -$16,800 1 11,500 9,500 2 8,750 7,100 3 2,500 3,500 If the company’s payback period is 2 years, which of these projects should be chosen? Group of answer choices Project A Neither Projects Both Projects Project B
- consider project D. calculate the payback period project c0 c1 c2 c3 D -372,000 200,000 140,000 72,000A3 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?Problem 10-10 (Algo) Interest capitalization; weighted-average method [LO10-7] On January 1, 2021, the company obtained a $3 million loan with a 12% interest rate. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 1,230,000 March 1, 2021 720,000 June 30, 2021 380,000 October 1, 2021 670,000 January 31, 2022 990,000 April 30, 2022 1,305,000 August 31, 2022 2,340,000 On January 1, 2021, the company obtained a $3 million construction loan with a 12% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2021 and 2022. The company’s other interest-bearing debt included two long-term notes of $5,600,000 and $7,600,000 with interest rates of 8% and 10%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company’s fiscal year-end is…