Chapter 8 problems

Rate of return Douglas Keel, a financial analyst for Orange Industries, wishes to estimate the rate of return for two similar-risk investments, X and Y. Douglas’s research indicates that the immediate past returns will serve as reasonable estimates of future returns. A year earlier, investment X had a market value of $20,000, and investment Y had a market value of $55,000. During the year, investment X gener-ated cash flow of $1,500, and investment Y generated cash flow of $6,800. The cur-rent market values of investments X and Y are $21,000 and $55,000, respectively. a. Calculate the expected rate of return on investments X and Y using the most recent year’s data.b. Assuming the two investments are equally risky, which one should Douglas rec-ommend? Why

iption Problem 1 Douglas Keel, a financial analyst for Orange Industries, wishes to estimate the rate of return for two similar-risk investments, X and Y. Douglas's research indicates that the immediate past returns will serve as reasonable estimates of future returns. A year earlier, investment X had a market value of $27,000; and investment Y had a market value of \$64,000. During the year, investment X generated cash flow of $2,025 and investment Y generated cash flow of $ 7,327. The current market values of investments X and Y are $27,781 and $64,000, respectively. a. Calculate the expected rate of return on investments X and Y using the most recent year's data. Submit Assignment

Help need, thank you for assistance

Hi there help me with this its kinda easy for you please cross check once after doing ( by eyes only)

An investment has expected...accounting questions please give me answer

Need help with this accounting questions

Need answer the financial accounting question

1.4 The table represents the cash flows received from the investments at the end year. Each investment requires an initial investment of $1000. Answer the questions related to the two investment opportunities in the table below. Year 1 2 3 4 5 Investment A 225 215 250 225 205 Investment B 220 225 250 250 210 There are two approaches to evaluate this investment. Show the necessary calculations. • Assume the interest rate ot 4.33%. Use present value analysis to determine which investment you should choose? Calculating the rate of returns of the investment, which investment would you choose and why?

Need help with this question solution general accounting

Need help with this question solution general accounting

Financial accounting please given answer

Need help calculating NPV, thank you!

What is the profitability...accounting questions....

I need help with accounting question

13. Nu Things, Inc., is considering investing in a business venture with the following anticipated cash flow results: Assume MARR is 20 percent per year. Based on an internal rate of return analysis, (1) determine the investment's worth, (2) state whether or not your results indicate the investment should be undertaken, and (3) state the decision rule you used to arrive at this conclusion. WILEY O 382 CHAPTER 8 / RATE OF RETURN ANALYSIS EOY Cash Flow EOY Cash Flow ΕΟΥ Cash Flow -$70,000 7 $14,000 14 $7,000 1 $20,000 8 $13,000 15 $6,000 2 $19,000 9 $12,000 16 $5,000 3 $18,000 10 $11,000 17 $4,000 4 $17,000 11 $10,000 18 $3,000 5 $16,000 12 $9,000 19 $2,000 $15,000 13 $8,000 20 $1,000

Hi can you help with this question please? An investment has the following cash flow profile. For each value of MARR below, what is the minimum value of X such that the investment is attractive based on an internal rate of return measure of merit? EOY 0 1 2 3 4 Cash Flow  $(30,000.00)  $ 6,000.00  $ 13,500.00  $X   $ 13,500.00  MARR is 12 percent/year

An investment has..accounting question

in this assignment, you will apply the concepts of company valuation that you have just learned to determine whether company XYZ is overvalued. We are currently at the end of year "t". You performed a thorough financial analysis of XYZ and forecast the following Free Cash Flows (FCF): Year t+1: 352 million USDYear t+2: 385 million USDYear t+3: 407 million USDFrom year t+3 onward, you expect the FCFs to grow at a constant yearly rate of 4%. Through your analysis, you also determined that the appropriate Weighted Average Cost of Capital (WACC) for XYZ was 11%. Finally, you know that XYZ has 1000 million USD in debt and 100 million shares outstanding.

7. Fuente, Inc., has identified an investment in which the following cash flows are deposited in the years listed. If the expected return is 8 percent, what is the future value of these cash flows at Year 4? What is the future value at a expected return of 11 percent? At 24 percent? Year Cash Flow $1,075 1,210 3 1,340 4 1,420

Exploring Finance: Short-Term versus Long-Term Cash Flows.  Short-Term versus Long-Term Cash Flows Conceptual Overview: Explore how time and the cost of capital affects the net present values of two alternative investments. The equations below show the discounted or present value of cash flows either one year or twenty years in the future. The first equation in each set of three shows the discounted value when the interest rate (or cost of capital) equals 5%. The second equation in each set of three shows the discounted value for an interest rate that is controlled by the slider. The third equation compares the two discounted values. Change the slider and observe whether the discounted value of the one-year cash flow changes more or less quickly than the discounted value of the twenty-year cash flow. 1.  What is the percentage change in the PV of $100 due in 1 year when the interest rate changes from 5% to 10%? (Move the slider to 10%.) Decreases by 60.6% Decreases by 4.33%…

You are a consultant to a firm evaluating an expansion of its current business. The cash-flow forecasts (in millions of dollars) for the project are as follows:    Years   Cash Flow   0   –100   1–10   + 15   On the basis of the behavior of the firm’s stock, you believe that the beta of the firm is 1.34. Assuming that the rate of return available on risk-free investments is 5% and that the expected rate of return on the market portfolio is 14%, what is the net present value of the project?