Bridgeport Company is considering two capital expenditures. Relevant data for the projects are as follows:ProjectInitial investmentAnnual cash inflowLife of projectSalvage valueA$260,084$46,590Project A7 years$0Project BClick here to view the factor table.Bridgeport Company uses the straight-line method to depreciate its assets.B$278,237Calculate the internal rate of return for each project. (For calculation purposes, use 5 decimal places as displayed in the factor tableprovided, e.g. 1.25125. Round answers to O decimal places, e.g. 15%.)$44,5409 years$0Internal rate of return%%

IRR is also known as Internal rate of Return. It is a capital budgeting technique which helps in…

Answered: Bridgeport Company is considering two…

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

See similar textbooks

Similar questions

Bramblett Recording Studio is considering two investment proposals (1 and 2). Data for the two proposals are presented below: Proposal 1 Proposal 2 Cost of investment $75,000 $100,000 Estimated salvage value 15,000 20,000 Average estimated net income 18,000 13,200 Calculate the return on average investment for both proposals.
The following data are accumulated by Lone Peak Inc. in evaluating two competing capital investment proposals: 3D Printer Truck Amount of investment $64,000 $24,000 Useful life 4 years 7 years Estimated residual value 0 0 Estimated total income over the useful life $7,680 $9,240 Determine the expected average rate of return for each proposal. If required, round your answers to one decimal place. 3D Printer % Truck %
Explorer Company is considering the following investment proposal: Initial investment: Depreciable assets (straight-line) $28,800 Working capital 3,200 Operations (per year for 4 years): Cash receipts $20,000 Cash expenditures 8,800 Disinvestment: Salvage value of equipment $2,400 Recovery of working capital 3,200 Discount rate: 10 percent Additional information for interest rate of 10 percent and four time periods: Present value of $1 0.68301 Present value of an annuity of $1 3.16987 What is the net present value for the investment? Select one: a. $14,658 b. $35,503 c. $3,825 d. $7,327
How do i solve the chart?
Please help me
Harris Corporation has provided the following data concerning an investment project that it is considering: Initial investment Annual cash flow Salvage value at the end of the project Expected life of the project Discount rate $ 160,000 $ 54,000 $ 11,000 O $67,000 O $160,516 O $516 O $(5,776) 4 15 per year years % Use Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the project is closest to:
1. Batinah Water Desalination project is a 15 year project. The project manager estimated that net initial investment expend in year zero is 100 million rials. The investment will be depreciated on a straight line basis to a 10 million book value by enc the project. During the operating phase revenue per year is 35 million and expense per year is estimated to be 20 million ria per year for 15 years. In year 15 net salvage value is estimated to be 15 million. WACC is estimated to be 10%. Tax Rate 209 1. Calculațe annual depreciation expenses 2. Calculate cash flow after tax CFAT in year 5 3. Calculate net present value. 4. Is it a good project Only final answers are required
Current Attempt in Progress Blossom Company is considering three capital expenditure projects. Relevant data for the projects are as follows. Annual Life of Project Investment Income Project 22A $240,400 $16,700 6 years 23A 273,200 20,740 9 years 24A 281,300 15,700 7 years Annual net income is constant over the life of the project. Each project is expected to have zero salvage value at the end of the project. Blossom Company uses the straight-line method of depreciation. Click here to view PV table. (a) Determine the internal rate of return for each project. (Round answers O decimal places, e.g. 13%. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Project 22A 23A 24A Internal Rate of Return % do % %
The following information relates to two capital investment projects - Project A and Project B: Initial investment of both projects = $400,000 Useful life = 4 years Estimate cost of capital = 16% Scrap value of both projects = $0 Straight-line method of depreciation is used The estimated net profits of Project A over its useful life: Year Amount 1 $70,000 2 $50,000 3 $100,000 4 $30,000 Project B is expected to generate net cash flows of $140,000 per year over the four year period. Calculate accounting rate of return on average investment of project A
Egy Company is considering three capital expenditure projects. Relevant data for the projects are as follows Project Investment 22A $243.300 23A 274.200 24A 280,500 Project 22A Annual Income is constant over the life of the project. Each project is expected to have zero salvage value at the end of the project. Iggy Company uses the straight-line method of depreciation Click here to view the factor table (a) 23A Annual Income $16.860 Determine the internal rate of return for each project. (Round answers O decimal places, eg: 13%. For calculation purposes, use 5 decimal places as displayed in the factor table provided) 24A 20,730 15,700 (b) Life of Project 6 years 9 years 7 years Internal Rate of Return If Iggy Company's required rate of return is 11%, which projects are acceptable The following project(s) are acceptable
A 5-year project is estimated to cost $700,000 and have no residual value. If the straight-line depreciation method is used and estimated total income is $231,000, determine the average rate of return giving effect to depreciation on the investment. Round your percentage answer to one decimal place (for example, a value of .1048 rounds to 10.5%).fill in the blank 1 %
D Company is evaluating three projects. Each project has a useful life of 5 years. Relevantdata on each project are as follows. Depreciation is computed by the straight-line method with no salvage value. The company’scost of capital/interest rate is 15%. (Assume that cash flows occur evenly throughout the year.)a. Compute the cash payback period for each project. (Round to two decimals.) (25%)b. Compute the net present value for each project. (Round to nearest dollar.) (25%)

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS