An investment with an initial outlay of R500 000 generates five successive annual cash inflows of R75 000,  R190 000, R40 000, R150 000 and R180 000 respectively. The cost of capital K is 10% per annum. The profitability index (PI) is

Q: Consider the following information for an internal rate of return calculatoin.  Projected cash flow…

A: The internal rate of return is the rate at which the NPV of the project is zero, which means no…

Q: Mike Derr Company expects to earn 12% per year on an Investment that will pay $616,000 six years…

A: Answer :Present value=?=?[1/(1+ rate) ^time]Future value = $616,000Rate = 8%Time = 7  yearsPresent…

Q: Park Company is considering an investment of $31,500 that provides net cash flows of $13,200…

A: The payback period represents the time period taken by the business to recover its investment. The…

Q: an investment is expected to produce the cash flows of €800, €500 and €600 at the end of the new…

A: Net present value is a capital budgeting techniques which help in decision making on the basis of…

Q: rporation has invested $167,000 in a long term project and is expecting the following cash flows…

A: Given information :

Q: A capital investment has an initial cost of $523,000. At the end of each of the next 9 years, it is…

A: The fluctuation between the estimated value of inflows and outflows of money over time is known as…

Q: A company is considering a project that delivers a constant cash-flow of 60 million SEK for six…

A: The IRR refers to the measure of a project’s profitability as it calculates the maximum return for…

Q: The initial cost of an investment is $65,000 and the discount rate (cost of capital) is 12%. The…

A: Initial Cost = i = $65,000Discount Rate = r = 12%Cash Flow per Year = c = $16,000Time = t = 8 Years

Q: Assuming a positive Net present value of P10, 000, a. Determine the amount of the original…

A: Original investment means the amount which an investor invests in an investment or a project. This…

Q: An investment of $81,000 yields a net annual income of $17,000 for 6 years. What is the internal…

A: Capital budgeting is the process of making capital investment decisions by a corporation. Capital…

Q: An investment is expected to generate cash flows of $20,000 next year (at time t=1), and $10,000 in…

A: Given: Year Particulars Amount 1 Cash inflows $20,000 2 Cash inflows $10,000   Growth rate…

Q: A project will generate the following cash flows. The required rate of return is 15%. If the…

A: Profitability index: Profitability is computed by dividing the present value of cash inflow to…

Q: Project Diggy cost P15,000 and its expected to produce cash flows of P4,500 per year for 5 years.…

A: IRR and MIRR are capital budgeting techniques used to evaluate whether it is profitable to invest in…

Q: An investment under consideration has a payback of seven years and a cost of $870,000. Assume the…

A: This question is concerned with two important capital budgeting tools of payback and NPV. Payback is…

Q: The company has a project with a 5-year life, an initial investment of $170,000, and is expected to…

A: Project Life = 5 years Initial investment = $170000 Expected annual cash flows = $57500 Required…

Q: FCF IS $800 in year 1 and $850 in year 2. Cash flows are expected to be earned at the end of each…

A: The present value is the present worth of the amount that will be paid or received at future.

Q: .If you invest $10,000 now into a project that will yield net revenues of $1.327 at the end of each…

A: Internal rate of return (IRR) refers to the discount rate that is associated with an investment's…

Q: Gossman Corporation is analyzing a capital expenditure that will involve a cash outlay of P104,904.…

A: Internal Rate of Return is that rate at which Present Value of Cash Inflow is equal to Present value…

Q: Calculate the Accounting Rate of Return (ARR) of the investment Internal rate of return (IRR)…

A: Accounting Rate of Return: It represents the rate expected to be earned by the project or…

Q: The profitability index of a certain project is 1.2 with an investment of P 56,600. Cost of capital…

A: The profitability index (PI) is a financial tool to measure the profitability of a proposed…

Q: A project has an initial cost of $56,000 and is expected to generate a single cash inflow of $77,000…

A: Excel Spreadsheet:

Q: An investment of $70,000 yields a net annual income of $15,000 for 6 years. What is the internal…

A:

Q: Find the IRR and NPV of an investment having initial cash outflow of €200,000. The cash inflows…

A: IRR - It is the compounded annual rate of interest at which returns will be accrued on a certain…

Q: or this investment? 19.54% -24.43% 13.03% 1. 29.31% 15 63%

A: Internal rate of return is return on which present value of cash flow is equivalent to initial…

Q: A company is considering a new investment project with the following cash flow estimates: Year 0:…

A: Net Present Value (NPV) is a measure that assesses the profitability of an investment by comparing…

Q: An investment that costs $30,000 will produce annual cash flows of $10,000 for a period of 4 years.…

A: A future cash flow (or stream of cash flows present )'s value (PV) is an estimate of how much it is…

Q: What is the profitability index for an investment with the following cash flows given a 20 percent…

A: The Profitability Index(PI) is one of the capital budgeting techniques that take into consideration…

Q: A project has an initial investment of $1,506. The cash inflows in the next four years are $392,…

A:

Q: The incremental cash flows for alternatives P and Q are shown. Determine which should be selected…

A: Internal rate of return method: Internal rate of return method is one of the capital investment…

Q: The present value of an annuity of $1 for 3 years at 15% is 2.2832 The net present value of…

A: Net Present Value: It represents the project's or investment's absolute profitability in amount.…

Q: A project requires an initial investment of $60 million and will then generate the same cash flow…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: Calculate the IRR and NPV for a $1,000,000 investment with a 5% return annually over a 5 year period…

A: The terms "net present value" (NPV) and "net present worth" (NPW) are used to describe a set of…

Q: An investment has an installed cost of $527,630. The cash flows over the four-year life of the…

A: First Question The discount rate the NPV is equal to zero is 21.76%  Question 10constant growth rate…

Q: Calculate Internal Rate of Return to the investor based on a sale of the project at 12/31/26 using a…

A: Internal Rate of Return  is a financial metric that measures the potential profitability of an…

Q: An investment of $158397 is expected to generate an after-tax cash flow of $94000 in one year and…

A: CF0 = -$158397CF1 = $94000CF2 = $129000

Q: An investment costs $4,000 today. This investment is expected to produce annual cash flows of…

A: Initial Investment = $4,000Cash Flows:Year 1: $1,200Year 2: $1,400Year 3: $1,300Year 4: $1,100We can…

Q: An investment opportunity requires an immediate cash outlay of $45,000, and then an $80,000 cash…

A: Cash outflow in year 0, COF0 = $45,000 Cash outflow in year 2, COF2 = $80,000  Cash inflow in year…

Q: Calculate the IRR and NPV 1

A: Net present value is determined by deducting the initial investment from the current value of cash…

Q: a. Calculate the following Periodic Total Returns on a 5-year investment. To your calculations,…

A: You have posted multiple questions. We will solve the first question for you. The return on…

Q: Project X has an initial cost of $46,919, and its expected net cash inflows are $11,500 per year for…

A: Initial Cost = i = $46,919Cash Flow = cf = $11,500Time = t = 6Weighted Average Cost of Capital =…

Q: A project requires a $3 million investment in net working capital (NWC) today, and will be fully…

A: As per the given information: Investment in net working capital (NWC) - $3 million Recovered fully…

Q: You have found an investment opportunity that will provide annual cash flows of $1,234 for 5 years…

A: Here, Cost is $6789 Annual Cash Flows is $1234 Time Period is 5 years Required Return is 12%

Q: An investment project involves an investment now of 100. In one year, a positive cash flow of 40 is…

A: Capital budgeting is the process by which a corporation examines potential large projects or…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.