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
Related questions
Question
Choices for the last requirement, "determine the approximate
a. 29%
b. 20%
c. 26%
d. 22%
Transcribed Image Text: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.
Transcribed Image Text: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)
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