A project requires a $30,000 initial investment and is expected to generate end-of-period annual cash inflows as follows:Year 1$ 12,000i = 10%n = 10.9091Year 2$ 8,000Assuming a discount rate of 10%, what is the net present value (rounded to the nearest whole dollar) of this investment? Selected present valuefactors for a single sum are shown in the table below:Oi = 10%n = 20.8264Multiple Choice$0Year 3$ 10,000O $21,000i =Total$ 30,000= 10%n = 30.7513

Net present value :— It is the difference between the present value of all cash inflows and the…

Answered: A project requires a $30,000 initial…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A project requires a $41,000 initial investment and is expected to generate end-of-period annual cash inflows of $18,500 for each of three years. Assuming a discount rate of 13%, what is the net present value of this investment? Selected present value factors for a single sum are shown in the table below: - 138 í = 138 n=2 1-13% n=3 n 1 0.8850 0.7831 0.6931
A project requires a $42,000 initial investment and is expected to generate end-of-period annual cash inflows as follows: Year 1 Year 2 $ 16,800 $ 10,400 i = 12% n = 4 0.8929 Assuming a discount rate of 12%, what is the net present value (rounded to the nearest whole dollar) of this investment? Selected present value factors for a single sum are shown in the table below: i = 12% n = 2 0.7972 Multiple Choice $0 $30,240 $(12,104) $33,826 Year 3 $ 14,800 $(8,174) Total $ 42,000 i = 12% n = 3 0.7118
Consider the following sets of investment projects: Compute the equivalent annual worth of each project at i = 13%, and determine the acceptability of each project.
H1. Account
Calculating Discounted Payback An investment project has annual cash inflows of $5,000, $5,500, $6,000, and $7,000, and a discount rate of 12 percent. What is the discounted payback period for these cash flows if the initial cost is $8,000? What if the initial cost is $12,000? What if it is $16,000?
Referring to the table below, calculate the Net Present Value (NPV) and Profitability Index (PI). The required rate of return for these projects is USD10%. The projects’ expected cash flows are as follows: Year Machine 1 (USD) Machine 2 (USD) 0 (17,000) (17,000) 1 8,000 2,000 2 7,000 5,000 3 5,000 9,000 4 3,000 9,500
Cannonier, In., has identified an investment project with the following cash flows: Year Cash Flow 1 $1,050 2 1,280 3 1,500 4 2,240 If the discount rate is 7 percent, what is the future value of these cash flows in Year 4?
An investment has an installed cost of $787,350. The cash flows over the four-year life of the investment are projected to be $312,615, $304,172, $245,367, and $229,431. a. If the discount rate is zero, what is the NPV? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. If the discount rate is infinite, what is the NPV? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations
An investment project has annual cash inflows of $5,000, $3,300, $4,500, and $3,700, for the next four years, respectively. The discount rate is 14 percent. a. What is the discounted payback period for these cash flows if the initial cost is $5,100? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the discounted payback period for these cash flows if the initial cost is $7,200? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the discounted payback period for these cash flows if the initial cost is $10,200? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Discounted payback period b. Discounted payback period c. Discounted payback period years years years
A project has the following cash flows : Year Cash Flows 0 −$ 12,100 1 5,350 2 7,720 3 5,120 4 −1,560 Assuming the appropriate interest rate is 7 percent, what is the MIRR for this project using the discounting approach?
A project has the following annual incremental after-tax cash flows (OCFs) that follow an initial investment of $10 million (all numbers in millions): Year OCF 1 5 2 20 3 5 4 -22 What is the NPV of the project if the required rate of return is 18% per annum?
Consider a project with the following cash flows in dollars ($): Year Cash Flow0 -15,0001 50002 50003 50004 5000 Assume the appropriate discount rate for this project is 12%. What is the payback period for this project? (Round your answer to the tenths.)

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