Chapter 5&6 Homework Excel

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%

Using discount rate 20% the project should be rejected or accepted

Find the NPV using 11% discount Year 0-3, Project A, B

which has a better IRR Project 1 Year Cashflows Discount Rate  10% 0  $                 (750,000.00)     1  $                   250,000.00     2  $                   300,000.00     3  $                   350,000.00     4  $                   200,000.00     5  $                   100,000.00                             Project 2 Year Cashflows Discount Rate 10% 0  $             (1,000,000.00)     1  $                   200,000.00     2  $                   300,000.00     3  $                   400,000.00     4  $                   500,000.00     5  $                   700,000.00

5 Year Cash Flow (X) Cash Flow (Y) -$ -$ 0 21,000 21,000 1 9,100 10,600 12.5 2 9,600 8,050 points 3 9,050 8,950 eBook Hint References Calculate the IRR for each project. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Project X Project Y % % Mc What is the crossover rate for these two projects? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Crossover rate %

8-9 Given the following information for projects X and Y, which one should be chosen and why?    Project   X  Project   Y  Net present value  $2,00,000  $3,000,000  Project life  5 years  8 years  Required return  10%  10% Select one: a. Choose Project X, as it has a lower equivalent annual cost than Project Y. b. Choose Project Y, as it has a lower equivalent annual cost than Project X. c. Choose Project Y, as it has a higher equivalent annual benefit than Project X. d. Choose Project X, as it has a higher equivalent annual benefit than Project Y. e. Choose Project Y, as it has a higher net present value than Project X.

Pls show proper steps

MC algo 9-3 Calculating Payback Period   There is a project with the following cash flows :  Year Cash Flow 0 −$ 24,700 1 7,400 2 7,900 3 7,300 4 5,500  What is the payback period?   Multiple Choice   4.00 years   3.84 years   3.38 years   2.71 years   3.65 years

Year O 1 2 3 4 Project X - $20,000 13,330 5,960 5,960 1,920 Project Y - $20,000 The PI for project X is 6,470 6,470 6,470 6,470 The cost of capital for both projects is 10 percent. Calculate the profitability index (PI) for each project. (Do not round discount factors. Round intermediate calculations to 2 decimal places, e.g. 15.25 and final answers to 4 decimal places, e.g. 1.2527.) Which project, or projects, should be accepted if you have unlimited funds to invest? If you have unlimited funds you should invest in and the PI for project Y is Which project should be accepted if they are mutually exclusive? If they are mutually exclusive you should invest in

Initial​ cost: ​$240,000 Cash flow year​ one: ​$25,000 Cash flow year​ two: ​$75,000 Cash flow year​ three: ​$150,000 Cash flow year​ four: ​$150,000 a. Using a discount rate of 10​% determine whether the company should accept or reject this project.   b. Should the company accept or reject it using a discount rate of 15​%?   c. Should the company accept or reject it using a discount rate of 20​%?

NPV profiles WACC (Dollars in Millions) Plan A Plan B Project NPV Calculations: NPVA NPVB Project IRR Calculations: IRRA IRRB NPV Profiles: Discount Rates 0% 5% 10% 15% 20% 22% 25% 11.00% NPVA $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 0 -$40.00 Formulas #N/A #N/A -$11.00 $2.47 $2.47 $2.47 #N/A #N/A NPVB 1 $6.39 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 2 3 $6.39 $6.39 4 $6.39 $2.47 5 6 7 $6.39 $6.39 $6.39 $2.47 $2.47 8 9 $6.39 $6.39 $2.47 $2.47 $2.47 10 $6.39 $2.47 11 $6.39 12 $6.39 13 $6.39 $2.47 $2.47 $2.47 14 $6.39 15 $6.39 $2.47 $2.47 16 $6.39 $6.39 $2.47 17 39 $2.47

Exercise (NPV) - 20 mins Project A, B and C have the following cash-flow projections: Year Project A (S) -10,000 3.000 0 1 2 3 3,000 3.000 3,000 Project B (S) -10,000 1,000 2,000 . 4,000 8,000 Project C (S) -14,000 8,000 8,000 -3,000 -5,000 * Calculate the Payback Period and Net Present Value (NPV) for each of the projects shown. Assume, i=10% Decide which is the best project. Justify! What is the advantages of IRR over NPV as a measure of profitability?

this is Capital budgeting tools ch 12 p 25 build a model

answer last 3 questions