Homework 3 Solutions (1)

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Don't use ai given answer accounting questions

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You are given the following data for a project that is to be evaluated using the APV method. Year EBIT CAPEX 0 O $201.765 O $193,822 O $185,617 O $222,872 O $213,918 1 $127.000 $60,000 2 Depreciation Increase in NWC Year-end net debt $80,000 Cost of net debt = 8% Unlevered cost of capital = 11.8% Corporate tax rate = 30% Calculate the total value of the project at t = 0. using the APV method. $72,000 $50,000 $100,000 $133,000 $40,000 $80,000 $60,000 $140,000 3 $138.500 $10,000 $84,000 $30,000 $140,000

Question 1 Grey Ltd has provided the following figures for two investment projects, only one of which may be chosen. Project X Project Y £ _ Initial outlay 200,000 180,000 Profit for year 1 65,000 35,000 2 65,000 35,000 3 75,000 65,000 4 35,000 85,000 Estimated resale value at end of year 4 60,000 40,000 Profit is calculated after deducting straight line depreciation. The business has a cost of capital of 10%. Required a) Calculate for each project i. Payback Average Return on Capital Employed Net present value (NPV) ii. iii. b) Critically discuss the merits and limitations of payback and NPV (Your answer is to be presented in an essay format NOT Bullet Points)

Question: Altro Corporation is considering the following three investment projects: Project R Project S Project T Investment required $33,000 Present value of cash inflows $33,333 Required: $40,000 $46,800 $97,000 $112,520 Rank the projects according to the profitability index, from most profitable to least profitable. (Ignore income taxes in this problem)

Information for two alternative projects involving machinery investments follows: Project 1 Initial investment Salvage value Annual income $ (128,000) Ө Project 2 $ (98,000) 18,000 14,080 11,600 a. Compute accounting rate of return for each project. b. Based on accounting rate of return, which project is preferred? Complete this question by entering your answers in the tabs below. Required A Required B Compute accounting rate of return for each project. Project 1 Project 2 Numerator: Accounting Rate of Return Denominator: Required A Required B Based on accounting rate of return, which project is preferred? Based on accounting rate of return, is preferred. = Accounting rate of return

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What is the year 1 cash flow for this project on these financial accounting question?

Question Content Area Net present value method, internal rate of return method, and analysis for a service company The management of Advanced Alternative Power Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows: Year Wind Turbines Biofuel Equipment 1 $400,000 $840,000 2 400,000 840,000 3 400,000 840,000 4 400,000 840,000 The wind turbines require an investment of $1,035,600, while the biofuel equipment requires an investment of $2,398,200. No residual value is expected from either project. Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Required: 1a.  Compute the net present value for each…

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nkt.3

nkt.3

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Provide required 4 answer

T4(c,d)- Please solve this question with all steps required. Many thanks.

solve a and b given in the image provided.

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kar

Please use excel formulas when answering questions