Choices for the last requirement, "determine the approximate internal rate of return from the choicies (pick the closest answer.a. 29% b. 20%c. 26%d. 22% Anderson Systems is considering a project costingP100,000 that has the following cash flow, salvagevalue and WACC data.WACC: 10.00%Cash SalvageFlow ValueYear50,000 35,000Year30,000 25,000Year40,000 15,000Year45,000 7,5004.Year30,0005.1.2. The following are the questions/requirements for thisdata set. Fill-up the answers in the next 6 questions:(Please follow specific instructions)Determine the payback period. (Round your finalanswer to the nearest two decimal places)Determine the bailout period. (Round your finalanswer to the nearest two decimal places)• Determine the accounting rate of return. (Pleaseanswer these percentages in amounts with twodecimal points e.g. X.Xx; do not denote percentageanymore)• Determine the net present value. (Round your finalanswer to the nearest peso; answers based on exactand rounded pv factors are both accepted)• Determine the profitability index (Round your finalanswer to the nearest two decimal places; answersbased on exact and rounded pv factors are bothaccepted)Determine the approximate internal rate of returnfrom the choices. (Pick the closest answer)

IRR is a rate at which present value of cash inflows is equal to present value of cashoutflows.

Answered: 9% b. 20% c. 26% d. 22

Business

Finance

9% b. 20% c. 26% d. 22

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

See similar textbooks

Related questions

Q: When using present worth to evaluate the attractiveness of a single investment alternative, what…

A: To calculate the attractiveness of investment there is need to calculate the present worth is…

Q: The expected return for an individual asset is the sum of expected returns in each state of the…

A: Expected rate of return is the most likely and probable and average rate of return that can be…

Q: Begin by selecting the formula to compute the current ratio. Current ratio formula =…

A: Current ratio: The financial ratio which evaluates the ability of a company to pay off the debt…

Q: The expected value, standard deviation of returns, and coefficient below.) Asset A Possible Outcomes…

A: Expected return-The expected return is calculated by multiplying the probability of each possible…

Q: a. If Sharon were risk neutral, which investment would she select? Explain why. b. If she were risk…

A: Risk Neutral-This type of investor is insensitive to risk i.e., while making investment decision,…

Q: All of the following items would appear on the balance sheet except Select one: O a. current…

A: A balance sheet is one type of financial document that shows a company's financial situation as of a…

Q: Find the numerical value of the factor (A/P, 30%,22).

A: We have; Capital Recovery function (A/P,30%,22) To Find: Numerical Value of the Function

Q: The CAPM model can be used to derive the cost сapital. A. Equity B. Borrowed С. Total D. Unlimited

A: The CAPM (capital assets pricing model) is a technique that helps to derive the cost of capital with…

Q: q4- What can be used to analyse the relationship between two categorical or qualitative variables?…

A: A scatter plot is a graphical representation that uses dots to represent values for two different…

Q: : (b) Write a detailed note on Minimum Attractive Rate of Return.

A: The minimum attractive rate of return (MARR) is the affordable rate of return utilized in the choice…

Q: find the trynors ratio for q and compare it to treynor ratio for m does this analysis indicate…

A: Here,Beta q is 1.25rf is 2%rm is 12%rq is 13.5%

Q: our mutually exclusive aiternotnves are compared and their intefnal rate of return (IR) values afe…

A: If the MARR example 10% for acceptable projects is accepted a project if the IRR is greater than…

Q: Profit volume ratio is used for the calculation of: Select one: O a. For all options provided b.…

A: The profit-volume ratio, which is commonly calculated as a percentage, reflects the connection…

Q: Expected return and standard deviation a. What is the expected return of asset b?

A: The expected return is the return that an investor expects on its investment under various…

Q: Consider the following payoff table: DA: Decision Alternative. State of Nature Decision Alternative…

A: It is a case of expected cash flows for different alternatives, based on different economic…

Q: How do you calculate the value at a node in a binomial tree? A. As a present value of the two…

A: A binomial tree is a graphical representation of the different intrinsic values that an option could…

Q: A. B. Expected return (%) C. D. 12- 10 OR- Actual 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1…

A: Determining the pricing status of share R in light of the provided chart is at issue. Based on all…

Q: The left side of an account is: Group of answer choices: either an increase or a decrease…

A: Account: It implies to a record that is maintained so as to keep the data related to the financial…

Q: Define each of the following terms:c. Compressed adjusted present value (CAPV) model

A: The net present value (NPV) of the project or any sort of investment opportunity that is financed…

Q: Calculate the geometric mean return for the following data set: (Negative value should be indicated…

A: -14% = -0.14,15% = 0.15,-16% = -0.16,13.7% = 0.137,14.1% = 0.141.

Q: The probability distributions of expected returns for the assets are shown in the following table:…

A: We need to compute return and standard deviation for asset A.

Q: A2) I need professional answer: Explain the difference between spot rates, short rates, and forward…

A: Spot, short, and forward rates are referred to as the future and current exchange rates used in…

Q: Probability Return 0.35 -2% 0.35 12% 0.3 18% Expected return is ______ ?

A: The table is: Probability Return 0.35 -2% 0.35 12% 0.3 18%

Q: M Dening investment and trade-in opening investment by 2 and ad ng closing investment from the

A: Answer :Option D. Subtracting closing investment from the opening and dividing by 2 is correct…

Q: Piercy, LLC, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash…

A: NPV shows the amount of value produced by the investment & is expressed in absolute…

Q: as many subparts as you can please. thank you

A: Detailed explanation:Part (a): Utility Function Well-BehavedFirst DerivativeSecond DerivativeThus,…

Q: In the asset price model, verify that E[S(t)] = Soeht E[S(t)²] = S²e(²μ+o²) t Var[S(t)] = Se²ut…

A: An asset price model is a theoretical framework used in finance to analyze and understand the…

Q: Required information Consider the following factors. 1. (FIP,21%,34) 2. (A/G,21%,45) Find the…

A: Single-Payment Compound-Amount(F/P): It refers to the single payment that is due at the end of a…

Q: The standard deviation of return on investment a is 0.10, while the standard deviation of return on…

A: It is a case of calculation of covariance when the data of standard deviation and correlation…

Q: You are given the following data about Asset A and Asset B.…

A: Standard deviation is the measure of risk and it gives idea about the risk involved in security.…

Q: Give typing answer with explanation and conclusion Question 1 To compensate for differences in the…

A: In capital budgeting when we compare two different projects it is not necessary that they both have…

Q: lternatives’ useful lives are different, B/C ratio analysis should preferably be based on: Select

A: Introduction : In simple words, the benefit to cost ratio is method to evaluate the effectiveness of…

Q: The expected value and the standard deviation of returns for asset A is Asset A Possible Outcomes…

A: Expected value:Possible outcomes Probability (a)Returns % (b)Expected value…

Q: Example 3 ss oont alaft A Following Example 2, consider a porfolio with three assets S1, S2 and S3…

A: Note: This post has three subparts. The second part contains a reference to an optimal portfolio…

Q: Determine the best Alternative, if data are PROFIT Decertaine the course in diagram. Alucrative 4/₂…

A: We are provided here with a decision tree. In finance we often make use of decision trees to find…

Q: The expected value of an investment: Answer a. Is what the owner will receive when the investment is…

A: Expected Return refers to return anticipated by an investor while making investment. It may differ…

Q: State the decision criteria for each of the following. (2)

A: Decision Rule: Profitbaility Index (PI): Greater than one is acceptable NPV: Project is…

Q: Solve the future value formula, FV=PMT- Choose the correct answer below.. OA. n= OB. ok D. n= n= n=…

A: This is based on the concept of time value of money. As per the concept of time value of money the…

Q: For the two period representative agent consumption-based capital asset pricing model (C-CAPM), an…

A: C-CAPM stands for the Consumption-based Capital Asset Pricing Model. It is an economic model that…

Question

Choices for the last requirement, "determine the approximate internal rate of return from the choicies (pick the closest answer.

a. 29%

b. 20%

c. 26%

d. 22%

Anderson Systems is considering a project costing
P100,000 that has the following cash flow, salvage
value and WACC data.
WACC: 10.00%
Cash Salvage
Flow Value
Year
50,000 35,000
Year
30,000 25,000
Year
40,000 15,000
Year
45,000 7,500
4.
Year
30,000
5.
1.
2.

The following are the questions/requirements for this
data set. Fill-up the answers in the next 6 questions:
(Please follow specific instructions)
Determine the payback period. (Round your final
answer to the nearest two decimal places)
Determine the bailout period. (Round your final
answer to the nearest two decimal places)
• Determine the accounting rate of return. (Please
answer these percentages in amounts with two
decimal points e.g. X.Xx; do not denote percentage
anymore)
• Determine the net present value. (Round your final
answer to the nearest peso; answers based on exact
and rounded pv factors are both accepted)
• Determine the profitability index (Round your final
answer to the nearest two decimal places; answers
based on exact and rounded pv factors are both
accepted)
Determine the approximate internal rate of return
from the choices. (Pick the closest answer)

Definition Definition Discount rate of a project wherein its net present value equals zero. Internal rate of return equates the present value of future cash flows with the initial investments. Internal rate of return helps to determine nominal cash flows.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Similar questions

Find the APR using the formula APR= 2nr/n+1 when n= 38 and r= 8%
2) Calculate the envelope set (frontier) for the following four assets and show that the individual assets all lie within this envelope set. 123456 A B E A FOUR-ASSET PORTFOLIO PROBLEM C Variance-covariance 0.01 0.30 0.06 -0.04 0.10 0.01 0.03 0.05 0.03 0.06 0.40 0.02 D 0.05 -0.04 0.02 0.50 F Mean returns 6% 8% 10% 15%
C) the internal rate of return is between what two whole discount rates (e.g, between 10%, and 11%, between 11% and 12% between 12% and 13% between 13%and 14% etc)? Can you help me solve this question with the table provided in excel?
Assuming that the rates of return associated with a given asset investment are normally distributed; that the expected return, r, is 18.7%; and that the coefficient of variation, CV, is 1.88, answer the following questions: a. Find the standard deviation of returns, sigma Subscript rσr. b. Calculate the range of expected return outcomes associated with the following probabilities of occurrence: (1) 68%, (2) 95%, (3) 99%.
Explain in words the following future- value formula: F = P(1 + r)".
Ok I understand that they all sum to one now and how to calculate the weights. How do I find the rate of return?
Find the numerical value of the factor (P/A,16.3%,15).
Just the second part please
Requirement 1. Calculate the breakeven point in units for (a) option 1 and (b) option 2.
In the asset price model, verify that E[S(t)] = Soeht E[S(t)²] = S²e(²µ+o²)t Var[S(t)] = Se²ut (eo²t - 1)
Net Present Value (NPV) ■ Definition • Formula & Calculation in 6 Steps . 2 Illustrative Examples Advantages and Disadvantages Net Present Value NPV = = Σ NCFt t=0 (1+i)
Suppose that we can describe the world using two states and that two assets are available, asset X an asset Y. We assume the asset’s future prices have the following distribution State Future Price Asset X Future Price Asset Y 1 $25 $50 2 $20 $40 The values of the unit claims implied by these assets are such that: A. C1 and C2 cannot be determined B. C1=1 and C2=1 C. C1=1, but we cannot determine C2 D. C1=5/4 and C2=5/4

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS