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- Walden Industries is considering investing in production-management software that costs $600,000, has $67,000 residual value, and leads to cost savings of $2,300,000 per year over its five-year life. Calculate the average amount invested in the asset that should be used for calculating the accounting rate of return. Question content area bottom Part 1 A. $333,500 В. $667,000 С. $67,000 D. $600,000An interior design studio is trying to choose between the following two mutually exclusive design projects: Year 0 1 2 3 Cash Flow Cash Flow (0) -$64,000 31,000 31,000 31,000 a-1 If the required return is 10 percent, what is the profitability index for both projects? (Round your answers to 3 decimal places. (e.g., 32.161)) Project I Project II -$18,000 9,700 9,700 9,700 Profitability Index a-2 If the company applies the profitability index decision rule, which project should the firm accept? O Project I O Project II Project I Project II b-1 What is the NPV for both projects? (Round your answers to 2 decimal places. (e.g., 32.16)) O Project I Project II NPV b-2lf the company applies the NPV decision rule, which project should it take?1. You may use Excel to answer this question. Explain completely which investment you would invest in today given the following information: Year 0 1 2 3 4 5 6 Investment 1 Revenues Discount rate 4.5% 0 2,000 4,000 6,000 8,000 6,000 4,000 Costs 3,000 2,000 1,000 Year 1,000 500 0 1 2 1,000 3 1,000 4 5 6 Investment 2 Revenues Discount rate 3.5% 0 0 3,000 6,500 9,000 13,000 15,000 Costs 8,000 6,000 3,000 3,000 2,000 1,000 0 Assume the firm wants to maximize profits where: Profits = Revenue - Costs Please show work using the time value of money formula.
- QUESTION 1 A new machine is to be purchased for $200,000. The company believes it will generate $75,000 annually in revenue due to the purchase of this machine. The company will have to train an operator to run this machine and this will result in additional labor expenses of $25,000 annually. The new machine will be depreciated using 5 years MACRS, even though the life of the project is 7 years, and the salvage value is estimated to be $0 at the end of year 7. The tax rate is 40% and the company's MARR is 15%.A company is thinking of investing in one of two potential new products for sale. The projections are as follows: Year Revenue/cost £ (Product A) Revenue/cost £ (Product B)0 (150,000) outlay (150,000) outlay 1 24,000 12,0002 24,000 25,3333 44,000 52,0004 84,000 63,333 Calculate the IRR for Product B only using 3% and 15% to 2 d.p.Georgetown Berbice Income before tax. 20,000 75,000Required rate of return. 12% 12%Investment 100,000 500,000 Calculate the residual income for Georgetown a. 1,500 b. 150,000 c. 15,000 d. 8,000
- Assignment Question: A. Messi wishes to find the present value of $ 3,500 that will be received 12 years from now. Messi opportunity cost is 8%. ? b. Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. Briefly explain the Popular Sources of Risk Affecting Financial Managers and Shareholders? 1:06 PM AAssume a $290,000 investment and the following cash flows for two products: Year Product X 1 A234 4 $ 100,000 100,000 75,000 40,000 Product Y $ 90,000 100,000 Product X Product Y 80,000 40,000 a. Calculate the payback for products X and Y. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. years years b. Which alternative would you select under the payback method? Product X is selected O Product Y is selectedPart 3 of 4 Solve : If the seller invested $2,750,000 to produce this increased service level, what would the Return on Investment be? (Note: round to 1 decimal point. Do not enter percent sign or commas) Assume an organization's current service level on order fill is as follows: $ 2,750,000lnvestment 87%targeted service level see part 2 of 4 cash flow lost at 87% service level 75%Current order fill see part 1 of 4 cash flow lost at 75% service level 6000Number of orders per year 65%Percent of unfilled orders back-ordered 35%Percent of unfilled orders cancelled $ 175Back order costs per order 10,000Lost pretax profit per cancelled order Return on Investment : Net return divided by the cost of the investment times 100.
- View Policies Current Attempt in Progress The manager of Sunland Company is given a bonus based on income before income taxes. Net income, after taxes, is $12000 for FIFO and $8600 for LIFO. The tax rate is 25%. The bonus rate is 15%. How much higher is the manager's bonus if FIFO is adopted instead of LIFO? O $128 O $5100 O $850 O $680 ! Save for Later Attempts: 0 of 1 used Submit Answer$1,449,185 Sales $130,380 Operating Income Total Assets (investment) $544,102 Target Rate of Return (Cost of 15% Capital) What is return on investment? Input your answer to 1 decimal place. For example if you calculate.1892 enter 18.9.Instruction: Use the table below to acquire information and answer the following questions. Please do not use signs like Rs., $, % etc in your answer. If you calculate percentage as 10.23% than answer must write like 10.23 only (do not write like 10.23% or 0.1023) Year 0 1 2 3 4 Cash flows −$950 $525 $485 $445 $405 Ms ABC is considering an opportunity of a new investment that has the following cash flow and weighted average cos of capital is 13 percent. What is the project's discounted payback in years? Answer should correct up to 2 decimal places. Ms ABC is considering an opportunity of a new investment that has the following cash flow and weighted average cos of capital is 13 percent. What is the project's net present value? Ms ABC is considering an opportunity of a new investment that has the following cash flow and weighted average cos of capital is 13 percent. What is the project's profitability index? Answer should correct up to 2…
