Calculate the following project, at cost of capital of 10%. Years Cash flow (RM) 0 -10,000 1 2,000 2 2,000 3 4,000 4 4,000 5 5,000 i) NPV ii) PI iii) Justified should we accept or reject the project?
Q: PI of a project tha
A: PI (Profitability Index) is defined as one of the techniques of capital budgeting. This technique…
Q: A company is evaluating two projects, A and B. The company's cost of capital has been determined to…
A: Cost of Capital 12% Year Project A Project B 0 - 1,00,000.00 ₽ -90,000.00 ₽ 1…
Q: Consider the following cash flows for two mutually exclusive capital investment projects. The…
A: Mutually exclusive projects are a set of projects out of which only one project can be accepted.
Q: Assume a $200,000 investment and the following cash flows for two alternative capital projects: Year…
A: Pay Back period is that length of time in which the initial investment of project is recovered in…
Q: Compute the payback statistic for Project B if the appropriate cost of capital is 12 percent and the…
A: Payback period is the payback period of the investment. It is the time period in which the…
Q: Compute the NPV statistic for Project X given the following cash flows if the appropriate cost of…
A: Capital budgeting is the technique used for analyzing the investment in long term projects. Net…
Q: Compute the NPV statistic for Project Y given the following cash flows if the appropriate cost of…
A: Net present value: Net present value is the difference between the present value of cash inflow and…
Q: Consider a project with the following cash flows. Year Cash Flow 0 -$15,000 1 41,000 2…
A: The internal rate of return is a discount rate that makes the net present value (NPV) of all cash…
Q: Consider the following cash flows: Year 0 1 2 3 4 5 6 Cash Flow -$9,000 $2,000…
A: NPV: It stands for Net Present value. It is the difference between PV (Present value) of cash…
Q: Blink of an Eye Company is evaluating a 5-year project that will provide cash flows of $36,100,…
A: The project NPV is calculated as present value of cash inflows less initial cost
Q: Hart Corp. is considering a project that has the following cash flow data. What is the project's…
A: The modified internal rate of return is another technique or method under capital budgeting…
Q: Compute the NPV for Project X with the cash flows shown as follows if the appropriate cost of…
A: NPV (Net Present Value) is one of the important techniques of capital budgeting decisions that aims…
Q: A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the…
A: Year Cash flow 0 -148000 1 68000 2 71000 3 55000
Q: The following investment opportunities are available to an investment center manager; Project…
A: Part (a) ROI=Operating income/Operating assets ROI for Project A=$90,000/$800,000=11.25% ROI for…
Q: Suppose your given the cash flow data of 3 project alternatives in the table below with 3 years of…
A: Alpha Beta Gamma Investment Cost $ 70,000.00 $ 50,000.00 $…
Q: A firm evaluates all of its projects by applying the IRR rule. Year Cash Flow 162,000 -%24 54,000 1…
A: Internal Rate of Return (IRR) is that discounting rate at which Net Present Value of the project is…
Q: Bottleneck Industries is considering project A. The project has expected cash flows of -$29,500.00…
A: NPV is net present value. It is the sum of present value of all future cash flows of a project.
Q: Expected Cash Flows Year Project A Project B 0 -400 -575 1 95 150 2 110 200 3 118 250 4 125 275 5…
A: Net Present Value is used to find out the present worth of an investment or a project by considering…
Q: Compute the payback statistic for Project B if the appropriate cost of capital is 11 percent and the…
A: Here,
Q: Below is the cash flow of project Alpha. (EOY: end of year) EOY Cash Flow 0 -$200,000 1 $25,000 2…
A: The net worth of the project after the deduction of the current worth of the cash outflows from the…
Q: ompute the MIRR for Project Y and accept or reject the project with the cash flows shown as follows…
A: MIRR is modified internal rate of return in this reinvestment of the fund is considered that is why…
Q: Calculate the following project, at cost of capital of 10% Years Cash flow (RM) 0 -10,000 1 2,000 2…
A: 1) NPV = PV of future Cashflows - Initial Investment 2) PI = PV of future Cashflows / Initial…
Q: 22
A: The calculation of net present value for project B is shown in the below table:
Q: The following information regarding an investment project is available. Discount rate 7% Year…
A: The net present value is an important method for capital budgeting. It refers to the difference…
Q: A firm evaluates all of its projects by applying the NPV decision rule. A project under…
A: Given:
Q: Calculate the following project, at cost of capital of 10% Years Cash Flow (RM) 0 -10,000 1 2000 2…
A: NPV= Present value of cash flows – Initial Outlay NPV = CF0 + CF1(1+rt)1 + ··· + CFt (1+rt)t where,…
Q: A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the…
A: IRR is the rate at which the project's Net Present Value is 0. It is the Maximum rate of return for…
Q: 4. Capital expenditure of a new investment project is $ 120,000,000; the expected annualnet cash…
A: The question is based on the concept of capital budgeting and different discounted techniques of…
Q: Judson's cost of capital is 12%, what is the project's NPV? Year Cash Flow in $ 0 ($1000) 1…
A: Net Present Value (NPV) is the sum of the present value of all the cash inflows and outflows.Please…
Q: A project has cash flows of -$35,000, $0, $10,000, and $42,000 for Years 0 to 3, respectively. The…
A: If the IRR of project is greater than required rate of return then we will accept the project and…
Q: A project has cash flows of -$152,000, $60,800, $62,300, and $75,000 for Years 0 to 3, respectively.…
A: Year Cash flow 0 -152000 1 60800 2 62300 3 75000 Required rate of return = 13%
Q: Consider the following two mutually exclusive projects: Year Cash Flow(A) -$ 63,000 39,000 33,000…
A: Since you have posted a question with multiple sub-parts, we will solve first four subparts for…
Q: A firm whose cost of capital is 10% is considering two mutually exclusive projects A and B, the cash…
A: Net present value refers to the capital budgeting technique that is used by the management to…
Q: Evaluate the following investment project according to the Net Present Value and QUESTION 3. the…
A: The meaning of the term used in the question is given below: Net Present Value: Net present value…
Q: You are analyzing two proposed capital investments with the following cash flows: Year Project X…
A: Here, Year Project X Project Y 0 - $20,000 - $20,000 1 12,630 7,470 2…
Q: Compute the NPV for Project X and accept or reject the project with the cash flows shown below if…
A: A method of capital budgeting that helps to evaluate the present worth of cash flow and a series of…
Q: Whichever project you choose, if any, you require a return of 14 percent on your investment.…
A: Formulas:
Q: Required return 8.50 percent ________ 1. What is the net present value of the…
A: Honor code: Since you have posted a question with multiple sub-parts, we will solve the first three…
Q: alculate discounted payback period, net present value and internal rate of return for each project…
A: Introduction 1. Discounted payback period Discounted payback period is the period when the…
Q: Calculate the Net Present Value (NPV) of the following cash flow
A: Net present value = present value of future cash flows - initial cash outflows
Q: 21
A: Profitability index is the ratio between the initial investment made and the present value of future…
Q: You are analyzing a project and have gathered the following data. Year Cash Flow -$37,500 15,240 1…
A: Using excel IRR function
Q: for the following cash flow, if i; = İb = 12% and MARR= 15%, 1. Determine i* by using MIRR? (final…
A: i = 12% MARR = 15% Cash Flows: Year Cash Flow 0 -450,000 1 -42,500 2 92,800 3 386,000…
Q: Solve the following problems. Provide proper solutions. 1. Given the information below and 15…
A: Net present value (NPV) is calculated as: = Present value of inflows - Present Value of outflow If…
Calculate the following project, at cost of capital of 10%.
Years | Cash flow (RM) |
0 | -10,000 |
1 | 2,000 |
2 | 2,000 |
3 | 4,000 |
4 | 4,000 |
5 | 5,000 |
i) NPV
ii) PI
iii) Justified should we accept or reject the project?
Step by step
Solved in 4 steps with 3 images
- Consider the following two mutually exclusive projects:Year Cash Flow (X) Cash Flow (Y)0 -$365,000 -$38,0001 25,000 16,0002 65,000 12,0003 65,000 17,0004 425,000 15,000Whichever project you choose, if any, you require a 13 percent return on your investment. i. Which investment will you choose if you use the payback decision criteria? Justify your answer.ii. Which investment will you choose if you use the NPV decision criteria? Justify your answer.iii. Which project will you choose ultimately based on your answers above?Solve the following problems. Provide proper solutions. 1. Given the information below and 15 percent cost of capital: OUTFLOW Year1: P800,000 Year2: P800,000 Year3: P800,000 Year4: P800,000 Year5: P800,000 P2,500,000 INFLOWS (a) Compute the net present value. (b) Should the project be accepted? Why? -----Better plc is comparing two mutually exclusive projects, whose details are given below.The company’s cost of capital is 12 per cent.Project A Project B£m £mYear 0 (150) (152)Year 1 40 80Year 2 50 80Year 3 60 50Year 4 60 40Year 5 80 30(a). Using the net present value method, which project should be accepted?(b). Using the internal rate of return method, which project should be accepted?(c). If the cost of capital increases to 20 per cent in year 5, would your advice change? Hello.i have the solution you send me but i am trying to understand where did you get the calculations for in the worknotes tabel. I did my own calculation but i dont get the same answer. For example for year 2 for project A you have 39.8597 How did you get to that without using the formula in excel. I need to write down the actual numbers. I got 22.3214 some im not sure how you got to that number. Can you help me please? Thank you
- Better plc is comparing two mutually exclusive projects, whose details are given below.The company’s cost of capital is 12 per cent.Project A Project B£m £mYear 0 (150) (152)Year 1 40 80Year 2 50 80Year 3 60 50Year 4 60 40Year 5 80 30(a). Using the net present value method, which project should be accepted?(b). Using the internal rate of return method, which project should be accepted?(c). If the cost of capital increases to 20 per cent in year 5, would your advice change? Hello.i have the solution you send me but i am trying to understand where did you get the calculations for in the worknotes tabel. I still cant calculate the IRR.i really dont understand how to do it. Can you help me please by using the numbers in the tabel so i can understand what is that you are adding or taking away please? I know how to calculate the NPV but not the IRR. I have went over and over this IRR but i still dont understand how you calculate it using the pv and the npv.i dont wanna use excel.Better plc is comparing two mutually exclusive projects, whose details are given below.The company’s cost of capital is 12 per cent.Project A Project B£m £mYear 0 (150) (152)Year 1 40 80Year 2 50 80Year 3 60 50Year 4 60 40Year 5 80 30(a). Using the net present value method, which project should be accepted?(b). Using the internal rate of return method, which project should be accepted?(c). If the cost of capital increases to 20 per cent in year 5, would your advice change? Hello.i have the solution you send me but i am trying to understand where did you get the calculations for in the worknotes tabel. I still cant calculate the IRR.i really dont understand how to do it. Can you help me please by using the numbers in the tabel so i can understand what is that you are adding or taking away please? I know how to calculate the NPV but not the IRRBetter plc is comparing two mutually exclusive projects, whose details are given below.The company’s cost of capital is 12 per cent.Project A Project B£m £mYear 0 (150) (152)Year 1 40 80Year 2 50 80Year 3 60 50Year 4 60 40Year 5 80 30(a). Using the net present value method, which project should be accepted?(b). Using the internal rate of return method, which project should be accepted?(c). If the cost of capital increases to 20 per cent in year 5, would your advice change?
- Better plc is comparing two mutually exclusive projects, whose details are given below.The company’s cost of capital is 12 per cent.Project A Project B£m £mYear 0 (150) (152)Year 1 40 80Year 2 50 80Year 3 60 50Year 4 60 40Year 5 80 30(a). Using the net present value method, which project should be accepted?(b). Using the internal rate of return method, which project should be accepted?(c). If the cost of capital increases to 20 per cent in year 5, would your advice change? Hello.i have the solution you send me but i am trying to understand where did you get the calculations for in the worknotes tabel. I did my own calculation but i dont get the same answer. Could you show mw the calculation but not in excel please, i need the calculation by formula manuallyBased on the parameters calculated, should this project goes ahead? Give your reasons for your answer. Economic Parameters Base case Project IRR Equity IRR NPV($millions)@12% Capital Expenditure($million) PayBack period (Year) WACC (Based on 75/25) 13.68 15.89 9,172,880 (85,000,000) 8.92 0.1246Consider the following two mutually exclusive projects: YEAR CASH FLOW (A) CASH FLOW (B)0 -$300,000 -$39,0001 20,000 18,0002 70,000 12,0003 80,000 18,0004 400,000 19,000 Whichever project you choose, if any, you require a 15 percent return on your investment.i) If you apply the payback period (PBP) criterion, which investment will you choose? Why?ii) If you apply the net present value (NPV) criterion, which investment will you choose? Why?iii) If you apply the profitability index (PI) criterion, which investment will you choose? Why?iv) If you apply the internal rate of return (IRR) criterion, which investment will you choose?Why?v) Based on your answers in (i) through (iv), which project will you finally…
- Which of the following comes closest to the net present value (NPV) of a project whose initial investment is $5 and which produces two cash flows: the first at the end of year 2 of $3 and the second at the end of year 4 of $7? The required rate of return is 13%? Select one: a. $1.84 b. $0 c. $1.64 d. $2.05 e. $2.2616. IRR/NPV. Consider the following project with an internal rate of return of 13.1%. (L08-2) Year 0 1 2 Cash Flow +$100 -60 -60 a. Should you accept or reject the project if the discount rate is 12%? b. What is project NPV?7) Consider the following project: Year Cash Flow 0 – $ 3,024 1 17,172 2 – 36,420 3 34,200 4 – 12,000 Year Cash Flow 0 -3,024 1 17,172 2 -36,420 3 34,200 4 -12,000 a) Determine the IRR (s) for this project. Do not use Excel sheet b) At which rates of return will the project be acceptable?