Please provide both Answer A project has an initial cost of $8,900 and produces cash inflows of $2,800, $5,200, and$1,600 over the next three years, respectively. What is the discounted payback period if therequired rate of return is 6 percent?IThe liabilities of Olga Company are $87,060. Also, common stock account is $145,800, dividendsare $91,610, revenues are $443,250, and expenses are $316,360. What is the amount of OlgaCompany's total assets?initial cost of 8-900-and-

Required Answer : 1 Step 1 : Discount Payback PeriodThe method followed in capital budgeting to…

Answered: A project has an initial cost of $8,900…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter21: Dynamic Capital Structures And Corporate Valuation

Section: Chapter Questions

Problem 9P

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Your company is planning to purchase a new log splitter for is lawn and garden business. The new splitter has an initial investment of $180,000. It is expected to generate $25,000 of annual cash flows, provide incremental cash revenues of $150,000, and incur incremental cash expenses of $100,000 annually. What is the payback period and accounting rate of return (ARR)?
Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the following cash flows over the next five years: $99,000, $88,000, $92,000. $87,000, and $72,000. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return in Excel. see Appendix C.
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Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a net cash inflow one year from now of 810,000. Assume the cost of capital is 10 percent. Required: 1. Break the 810,000 future cash inflow into three components: a. The return of the original investment b. The cost of capital c. The profit earned on the investment 2. Now, compute the present value of the profit earned on the investment. 3. Compute the NPV of the investment. Compare this with the present value of the profit computed in Requirement 2. What does this tell you about the meaning of NPV?
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A project has an initial cost of $8,900 and produces cash inflows of $2,800, $5,200, and $1,600 over the next three years, respectively. What is the discounted payback period if the required rate of return is 6 percent? I The liabilities of Olga Company are $87,060. Also, common stock account is $145,800, dividends are $91,610, revenues are $443,250, and expenses are $316,360. What is the amount of Olga Company's total assets? initial cost of 8-900-and-
A project has an initial cost of $8,900 and produces cash inflows of $2,800, $5,200, and $1,600 over the next three years, respectively. What is the discounted payback period if the required rate of return is 6 percent? I The liabilities of Olga Company are $87,060. Also, common stock account is $145,800, dividends are $91,610, revenues are $443,250, and expenses are $316,360. What is the amount of Olga Company's total assets? £0.000 and-
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A project has an initial investment of $1,506. The cash inflows in the next four years are $392, $459, $555, and $555. If the discount rate is 12%, calculate its profitability index..
Perez Company is considering an investment of $26,945 that provides net cash flows of $8,500 annually for four years.(a) What is the internal rate of return of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.)(b) The hurdle rate is 7%. Should the company invest in this project on the basis of internal rate of return?

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