Assuming infinite replication and a cost of capital of 11 percent, determine the net present value of this project using the Equivalent Annual Annuity approach. Year Cash Flow 0 ($5,000.00) 1 $2,000.00 2 $1,600.00 3 $1,400.00 4 $1,200.00 5 $1,000.00 O $1,450 $1,066 $1,250 $896 O $740
Q: A project has estimated annual net cash flows of $8,000 for five years and is estimated to cost…
A: The difference between the present value of cash inflows and present value of cash outflows is net…
Q: Cellan Manufacturing is considering the following two investment proposals: Proposal Y Proposal X…
A: The question is related to Capital Budgeting.The Present Value of future cash inflows are calculated…
Q: Project 1 requires an original investment of $219,120. The project will yield cash flows of $74,000…
A: Net present value of Project 1 = Present value of cash inflows + Present value of salvage value -…
Q: Net Present Value—Unequal Lives Project 1 requires an original investment of $93,000. The project…
A: Req-a Year Cash Flow PV Factor @10% Present Value Year 1 -4 $19,000 3.170 $60,230 Year 4…
Q: Net Present Value—Unequal Lives Project 1 requires an original investment of $46,000. The project…
A: a. The calculation is: The formulation image is:
Q: Net Present Value A project has estimated annual net cash flows of $8,000 for five years and is…
A: The net present value of a project is calculated by deducting the cost of the project from the…
Q: Net Present Value A project has estimated annual net cash flows of $12,500 for eight years and is…
A: Present value is an estimate of the present value of future cash values that may be received at a…
Q: Net Present Value—Unequal Lives Project 1 requires an original investment of $55,000. The project…
A: Formulae for NPV NPV=Present value of cash flows- present value of outflows When there is a equal…
Q: Use the following table for this questio Present value of an Annuity of $1 Periods…
A: Net present value(NPV) is the difference between present value of all cash inflows and initial…
Q: A project has estimated annual net cash flows of $6,250 for two years and is estimated to cost…
A: Net Present value is present value of cash flow minus initial investment.
Q: The management of Advanced Alternative Power Inc. is considering two capital investment projects.…
A: Following are the answers to the questions attempted wrongly. Note: It is assumed that the present…
Q: etermine the net present value of Project 1 over a six-year life with residual value, assuming a…
A:
Q: 2/Gamma Corporation is considering an investment of $518,000 in a land development project. The…
A: Net Present value is a capital budgeting technique used to evaluate a project. Under this method,…
Q: Net present value A project has estimated annual net cash flows of $10,000 for 2 years and is…
A: NPV of a project refers to the profitability of the project calculated by discounting the future…
Q: A project is estimated to cost $326,145 and provide annual net cash flows of $85,000 for eight…
A: The internal rate of return represents better profitability of an outlay. At 15% and 20% Net,…
Q: Assuming infinite replication and a cost of capital of 10.5 percent, determine the net present value…
A: One of two strategies used in capital budgeting to assess projects that operate independently with…
Q: A project has estimated annual net cash flows of $7,500 for three years and is estimated to cost…
A: Present value index = Present value of net cash inflows / Present value of cash outflows Net Present…
Q: Determine the internal rate of return for this project, using the Present Value of an Annuity of $1…
A: Internal rate of return The Internal Rate of Return (IRR) is the discount rate that makes the NPV of…
Q: Internal Rate of Return A project is estimated to cost $358,020 and provide annual net cash flows of…
A: The actual rate of return provided by an investment is referred to as the Internal rate of return.…
Q: Based on the following table, what is the approximate Internal Rate of Return (IRR) for a project…
A: The objective of this question is to calculate the Internal Rate of Return (IRR) for a project based…
Q: Net present value A project has estimated annual net cash flows of $225,000 for 8 years and is…
A: The NPV of a project refers to the measure of the profitability of the project calculated by…
Q: A project is estimated to cost $148,995 and provide annual net cash flows of $43,000 for four years.…
A: IRR, or Internal Rate of Return, is a financial metric used to assess the profitability of an…
Q: Net Present Value A project has estimated annual net cash flows of $70,000 for four years and is…
A: Given data; Annual cash inflow: Year 1 = $70,000 Year 2 = $70,000 Year 3 = $70,000 Year 4 = $70,000…
Q: Compute the discounted payback statistic for Project C if the appropriate cost of capital is 7…
A: YearCash flows Present value @7%Cumulative cash…
Q: 10 7.360 6.145 5.650 5.019 4.192 Determine (a) the net present value of the project and (b) the…
A: Information Provided: MARR = 10% Annual net CF = $8750 Estimated cost = $30,000
Q: Please show step by step Net Present Value—Unequal Lives Project 1 requires an original investment…
A: The Net Present Value (NPV) of investment seems to be the sum of all future cash flows discounted to…
Q: A project is estimated to cost $210,862 and provide annual net cash flows of $31,000 for nine years.…
A:
Q: A project has estimated annual net cash flows of $15,000 for seven years and is estimated to cost…
A: Answer a) Net present value =Present value of cash inflows - Initial cash outflows Present value of…
Q: A project has estimated annual net cash flows of $7,500 for ten years and is estimated to cost…
A: Net present value(NPV) is the difference between present value of cash inflows and initial…
Q: A project is estimated to cost $248,144 and provide annual net cash flows of $52,000 for 9 years.…
A: INTERNAL RATE OF RETURN Internal Rate of Return is one of the important Capital Budgeting…
Q: Internal rate of return A project is estimated to cost $480,250 and provide annual net cash flows of…
A: A financial metric called the Internal Rate of Return (IRR) is employed to assess the economic…
Q: Net Present Value A project has estimated annual net cash flows of $7,500 for three years and is…
A: NPV = PV of cash inflows - initial cost PV = PV factor * cash inflows per annum Since project has 3…
Q: A project has estimated annual net cash flows of $6,250 for nine years and is estimated to cost…
A: Net present value of a project is calculated by deducting the cost of project from the present value…
Q: A project is estimated to cost $402,360 and provide annual net cash flows of $120,000 for 5 years.…
A: The Internal Rate of Return indicates the annualized rate of return for a given investment. At…
Q: A project is estimated to cost $204,533 and provide annual net cash flows of $61,000 for five years.…
A: IRR is internal rate of return and is the break-even rate at which present value of cash flow is…
Q: Use the following table: Present Value of an Annuity of 1 Period…
A: Concept. IRR ( internal rate of return) Internal rate of return is method of calculating investments…
Q: A project is estimated to cost $361,465 and provide annual net cash flows of $83,000 for six years.…
A: Internal Rate of Return (IRR) It can be referred to as that rate of interest at which the present…
Q: et Present Value—Unequal Lives Project 1 requires an original investment of $47,900. The project…
A: The net present value method is used to evaluate investment projects. We can evaluate the project by…
Q: A project has estimated annual net cash flows of $7,500 for one years and is estimated to cost…
A:
Q: Net Present Value A project has estimated annual net cash flows of $13,750 for three years and is…
A: Initial investment = $30,000 Annual cash inflow = $13,750 Time (n) = 3 years Interest rate (i) = 15%…
Q: Use the following table, Present Value of an Annuity of 1 Period 8% 9% 10% 1.926.917 .909 2 1.783…
A: If a group of cash flows occur at various dates, they are said to have a net present value or net…
Q: A project is estimated to cost $58,995 and provide annual net cash flows of $9,500 for 8 years.…
A: Discount factor = estimated cost of the project / annual net cash flows = $58,995 / $9,500 = 6.210
Q: A project is estimated to cost $320,320 and provide annual net cash flows of $77,000 for seven…
A: Internal Rate of Return: Internal Rate of Return is the return where the sum of discounted cash…
Q: A project has estimated annual net cash flows of $15,000 for three years and is estimated to cost…
A: Net present value of the Project = Present value of net cash inflow - initial investment where,…
Q: A project has estimated annual net cash flows of $147,000 for 4 years and is estimated to cost…
A: For a given project, NPV and the present value index have to be found. The initial investment is…
Q: A project is estimated to cost $496,798 and provide annual net cash flows of $89,000 for seven…
A: Compute the present value factor: Present Value Factor = Initial Investment / Cash inflows…
Step by step
Solved in 3 steps with 2 images
- Internal Rate of Return A project is estimated to cost $117,055 and provide annual net cash flows of $41,000 for four years. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Determine the internal rate of return for this project, using the Present Value of an Annuity of $1 at Compound Interest table shown above. %Net Present Value A project has estimated annual net cash flows of $7,500 for three years and is estimated to cost $45,000. Assume a minimum acceptable rate of return of 10%. Use the Present Value of an Annuity of $1 at Compound Interest table below. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Determine (a) the net present value of the project and (b) the present value index. If required, use the minus sign to indicate a negative net present value. Net present value of the project (round to the nearest dollar) Present value index (rounded to two decimal places)Net Present Value A project has estimated annual net cash flows of $5,000 for five years and is estimated to cost $32,500. Assume a minimum acceptable rate of return of 15%. Use the Present Value of an Annuity of $1 at Compound Interest table below. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 0.893 1 0.943 0.909 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 2.487 2.673 2.402 2.283 2.106 3.465 3.037 2.589 4 3.170 2.855 3.791 5 4.212 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 4.564 7 5.582 4.868 4.160 3.605 4.968 8 6.210 5.335 4.487 3.837 4.772 9 6.802 5.759 5.328 4.031 5.650 5.019 10 7.360 6.145 4.192 Determine (a) the net present value of the project and (b) the present value index. If required, use the minus sign to indicate a negative net present value. Net present value of the project (round to the nearest dollar) Present value index (rounded to two decimal places)
- Net Present Value A project has estimated annual net cash flows of $10,000 for five years and is estimated to cost $45,000. Assume a minimum acceptable rate of return of 6%. Use the Present Value of an Annuity of $1 at Compound Interest table below.Net Present Value—Unequal Lives Project 1 requires an original investment of $63,800. The project will yield cash flows of $13,000 per year for five years. Project 2 has a calculated net present value of $15,600 over a three-year life. Project 1 could be sold at the end of three years for a price of $56,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690…Net Present Value A project has estimated annual net cash flows of $13,750 for three years and is estimated to cost $30,000. Assume a minimum acceptable rate of return of 15%. Use the Present Value of an Annuity of $1 at Compound Interest table below. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Determine (a) the net present value of the project and (b) the present value index. If required, use the minus sign to indicate a negative net present value. Net present value of the project (round to the nearest dollar) Present value index (rounded to two decimal places)
- Net Present Value A project has estimated annual net cash flows of $6,250 for eight years and is estimated to cost $37,500. Assume a minimum acceptable rate of return of 15%. Use the Present Value of an Annuity of $1 at Compound Interest table below. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9. 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Determine (a) the net present value of the project and (b) the present value index. If required, use the minus sign to indicate a negative net present value. Net present value of the project (round to the nearest dollar) Present value index (rounded to two decimal places) Feedback V Check My Work a. Multiply the present value factor for an annuity of…Net Present Value A project has estimated annual net cash flows of $96,200 for four years and is estimated to cost $315,500. Assume a minimum acceptable rate of return of 10%. Use the Present Value of an Annuity of $1 at Compound Interest table below. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.352 2.991 6 4.917 4.355 4.111 3.784 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Determine (1) the net present value of the project and (2) the present value index. If required, use the minus sign to indicate a negative net present value. Net present value of the project (round to the nearest dollar) $ Present value index (rounded to two decimal places)Multiple choice: If for five years, the cash inflows are uniform at P120,000 which present value of annuity factor are you going to use to covert the inflows into the present value assuming that the cost of capital is 12%? • 0.56743• 1.56743• 3.60478• 2.40188
- Net Present Value—Unequal Lives Project 1 requires an original investment of $91,100. The project will yield cash flows of $14,000 per year for eight years. Project 2 has a calculated net present value of $19,600 over a six-year life. Project 1 could be sold at the end of six years for a price of $58,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626…A project has estimated annual net cash flows of $147,000 for 4 years and is estimated to cost $475,500. Assume a minimum acceptable rate of return of 10%. Use the Present Value of an Annuity of $1 at Compound Interest table below. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Determine (1) the net present value of the project and (2) the present value index. If required, use the minus sign to indicate a negative net present value. Net present value of the project (round to the nearest dollar) $ Present value index (rounded to two decimal places)Net Present Value—Unequal Lives Project 1 requires an original investment of $73,800. The project will yield cash flows of $16,000 per year for eight years. Project 2 has a calculated net present value of $22,600 over a six-year life. Project 1 could be sold at the end of six years for a price of $76,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626…
