1. You may use Excel to answer this question. Explain completely which investment youwould invest in today given the following information:Year0123456Investment 1RevenuesDiscount rate 4.5%02,0004,0006,0008,0006,0004,000Costs3,0002,0001,000Year1,0005000121,00031,000 456Investment 2RevenuesDiscount rate 3.5%003,0006,5009,00013,00015,000Costs8,0006,0003,0003,0002,0001,0000Assume the firm wants to maximize profits where: Profits = Revenue - CostsPlease show work using the time value of money formula.

Investment 1 Investment 2 Year Revenues Costs Year Revenues Costs Discount rate 4.5% Discount…

You may use Excel to answer this question. Explain completely which investment you would invest in today given the following information: Year 0 1 2 3 4 5 6 Investment 1 Revenues Discount rate 4.5% 0 2,000 4,000 6,000 8,000 6,000 4,000 Costs 3,000 2,000 1,000 1,000 1,000 1,000 500 Year 0 1 2 3 4 5 6 Investment 2 Revenues Discount rate 3.5% 0 0 3,000 6,500 9,000 13,000 15,000 Costs 8,000 6,000 3,000 3,000 2,000 1,000 0 Assume the firm wants to maximize profits where: Profits = Revenue - Costs Please show work using the time value of money formula.

You may use Excel to answer this question. Explain completely which investment you would invest in today given the following information: Year 0 1 2 3 4 5 6 Investment 1 Revenues Discount rate 4.5% 0 2,000 4,000 6,000 8,000 6,000 4,000 Costs 3,000 2,000 1,000 1,000 1,000 1,000 500 Year 0 1 2 3 4 5 6 Investment 2 Revenues Discount rate 3.5% 0 0 3,000 6,500 9,000 13,000 15,000 Costs 8,000 6,000 3,000 3,000 2,000 1,000 0 Assume the firm wants to maximize profits where: Profits = Revenue - Costs Please show work using the time value of money formula.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You have been asked by an investor to compute for the Economic Value Added of the companies he is considering to invest into as follows: E V A Net Investment 55,000,000 60,000,000 70,000,000 WACC 8% 9% 10% Net Income after Tax 3,510,000 2,750,000 5,230,0000 Net Operating Income After Tax 4,550,000 5,450,000 6,850,000 Which Company under consideration has the highest EVA Which companies would you recommend for investment, Why? What is the EVA of each companies under consideration?
Calculate the EAR of the following investment, entered as a percentage (Example: if your answer is 0.145, enter 14.5) Year Number Cashflow 0 -11400 1 3500 2 3000 3 3100 4 2800 Your Answer:
4. We only have OMR 800,000 to invest. Which do we select based on Weighted average profitability index method ? Project NPV Investment PI A 430,000 500,000 B 241,250 225,000 C 394,250 375,000 D 262,000 575,000
Calculate the internal rates of return of the following investment: Net investment -$1,100 Year 0 Net cash flows +6,500 Year 1 -11,400 Year 2 +6,000 Year 3 Round your answers to the nearest whole number and enter them in ascending order. IRR1: 0% IRR2: % IRR3: %
Calculate the HPR of the following investment, entered as a percentage (Example: if your answer is 14.5%, enter 14.5 and not 0.145) Period Cashflow 0 -14100 1 3300 2 3300 3 3100 4 2800
Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 6% return from its investments. Project X1 Project X2 Initial investment $ (114,000) $ (188,000) Net cash flows in: Year 1 42,000 85,500 Year 2 52,500 75,500 Year 3 77,500 65,500 Compute the internal rate of return for each of the projects using Excel functions. Based on internal rate of return, indicate whether each project is acceptable. Note: Round your answers to 2 decimal places.
Assume your organization wishes to make a Php 200,000 investment with a private equity firm in 2021. Taking into account all of the risks, the current discount rate is 12%, and the revenue stream/dividends are as follows: 2022 50002023 60002024 70002025 80002026 90002027 100002028 11000 Determine the following:a. NPV for the period 2022 through 2028;b. Total NPV using manual computation;c. Total NPV using the Excel function; andd. IRR rate.
Calculate the APR of the following investment, entered as a percentage (Example: if your answer is 14.5%, enter 14.5 and not 0.145) Year Number Cashflow 0 -11000 1 3000 2 3500 3 2900 4 2800
A financial manager must choose between three alternative investments. Each asset is expected to provide earnings over a three-year period as described below. Based on the wealth maximization goal, the financial manager would choose (Justify your answer) Year Asset X Asset Y Asset Z 1 $15,000 $ 4,000 $ 6,000 2 $9,000 $10,000 $14,000 3 $5,000 $15,000 $11,000 $29,000 $29,000 $31,000 (a) Asset X. (b) Asset Y. (c) Asset Z. (d) Be indifferent between Asset X and Asset Y
Can you show me how this is done? Kepner Inc, is considering a capital investment project. that will provide annual cash flows of $31,248, requires an initial investment of $62,241, and the PV of cash flows is $106,796. What is the profitability index of the project? Round your answer 2 decimal places Selected Answer: 76 Correct Answer: 1.72 ± 0.01
1. Enter your answers into the box below. Make sure you label your answers using 1, 2,..., etc. XYZ Co has two investments X and Y. Investment X has an initial capital outlay of $500 million, and the investment is expected to generate $1200 million in nine years. Investment Y has an initial capital outlay of $200 million, and the investment is expected to generate $450 million in nine years. Assume XYZ has a cost of capital of 10%. 1. Determine the internal rate of return of Investment X and Investment Y. Should X and Y be taken? 2. Determine the net present value of Investment X and Investment Y. Should X and Y be taken? 2. Enter your answers into the box below. Make sure you label your answers using 1, 2,..., etc. XYZ Co is considering to purchase equipment that has 12 years of life and requires an initial capital outlay of $240 million. The equipment will be depreciated using straight line method to zero book value in 12 years. The salvage value of the equipment is…
How I resolve this problems please give me the detail A firm has the following investment alternatives: Year A B C 1 $400 $--- $---- 2 400 400 ---- 3 400 800 ---- 4 400 800 1,800 Each investment cost of capital is 10 percent a. What is each investment's internal rate of return? b. Should the firm make any of theses investment? C. What is each investemtn's net present value? d. Should the firm make any of these investment

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