The table titled "Cash Flow" presents a comparison between two projects, E and F, over a six-year period.- **Cost**: - Project E: $44,000 - Project F: $90,000- **Annual Cash Flow**: - **Year 1**: - Project E: $9,778 - Project F: $36,000 - **Year 2**: - Project E: $9,778 - Project F: $27,000 - **Year 3**: - Project E: $9,778 - Project F: $18,000 - **Year 4**: - Project E: $9,778 - Project F: $9,000 - **Year 5**: - Project E: $9,778 - Project F: $0 - **Year 6**: - Project E: $9,778 - Project F: $0This table allows for a comparative analysis of the initial costs and the annual cash flows associated with both projects over a six-year timespan. **Payback Period***What are the payback periods of projects E and F in the following table? Assume all the cash flow is evenly spread throughout the year. If the cutoff period is 3 years, which project(s) do you accept?*---**What is the payback period for project E?**____ years (Round to one decimal place.)

Answered: Image /qna-images/answer/c50594c3-d19c-4cad-be65-5ec7ec2e115c.jpg

Cash Flow E $44,000 $9,778 $9,778 Cost $90,000 Cash flow year 1 $36,000 Cash flow year 2 Cash flow year 3 Cash flow year 4 Cash flow year 5 $27,000 $9,778 $18,000 $9,778 $9,000 $0 $9,778 Cash flow year 6 $9,778 $0

Cash Flow E $44,000 $9,778 $9,778 Cost $90,000 Cash flow year 1 $36,000 Cash flow year 2 Cash flow year 3 Cash flow year 4 Cash flow year 5 $27,000 $9,778 $18,000 $9,778 $9,000 $0 $9,778 Cash flow year 6 $9,778 $0

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

Related questions

Q: Stock R has a beta of 2.2, Stock S has a beta of 0.4, the required return on an average stock is…

A: Capital Asset Pricing (CAPM) model is a method used for finding the return on stock depends on…

Q: Year 0 $10,000.00 1 $ 3,000.00 Project A Cash Flow Project B Cash Flow $11,000.00 $5,000.00 2 $…

A: Step 1: The calculation of NPV, IRR, and MNPV ABCD1YearProject AProject BFV Project A @ 21%20…

Q: Net present value Using a cost of capital of 11%, calculate the net present value for the project…

A: NPV can be calculated by following function in excel=NPV(rate,value1,[value2],…) + Initial…

Q: B Problem Walk-Through A company is analyzing two mutually exclusive projects, S and L, with the…

A: IRR of a project is the discount rate which makes net present value of the project equals to zero.…

Q: Select all that apply Which of the following statements regarding the statement of cash flows are…

A: Cash Flow Statement - It is the Statement which represents the inflow and outflow of cash and cash…

Q: Supposing that Mr. Ptolemy achieved his Year 3 and Year 4 performance goals as planned, compare the…

A: To get the trends we will compute the yoy changes (year on year) changes for each line item for each…

Q: MACHINE A MACHINE B INITIAL COST R100 000 R110 000 EXPECTED ECONOMIC LIFE 5 YEARS 5 YEARS EXPECTED…

A: MACHINE A INITIAL COST 1,00,000.00 EXPECTED DISPOSAL/RESIDUAL VALUE 10,000.00 Year…

Q: Branch Computer ATM Office System Kiosk Expansion Upgrade Expansion Amount to be $420,000 $350,000…

A: Net present value is calculated by deducting initial investment from present value of cash inflows.…

Q: -11 Present values For each of the cases shown in the following table, calculate the present value…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: $ 120,400 71,400 1,932,000 210,000 28,000 210,000 Interest revenue Cash Sales Accumulated…

A: The income statement explains the financial performance of the company for a particular period of…

Q: in Net cash flow 20,000 40,000 IRR PW(15%) What is the value of IRR? 6,300 Select one: O 15% O 18% O…

A: Internal rate of return is the rate at which the present value of cash inflows are equals to the…

Q: Insurance costs 2 millon Increase in working capital 5 milion OSM Fees 3milion Interest Expenses…

Q: Domco manufactures small gasoline engines for the home gardening power tool industry. Their…

A: Net Cash Flow in Year 0: 𝑁𝑒𝑡 𝐶𝑎𝑠ℎ 𝑂𝑢𝑡𝑓𝑙𝑜𝑤=$12,500,000−$45,000+$280,000 -…

Q: Year 0 1 2 3 4 01 5 6 7 8 9 10 Net Cash Outflows Amount Invested $ 4,600,000 Net Cash Inflows Annual…

A: Payback period is the time taken to recover the initial investment. It is one of the popular capital…

Q: What is the project's MIRR? r = 10.00% 0 -$875 Year Cash flows O a. 22.51% O b. 11.75% O c. 17.21% O…

A: YearsCash Flows0($875)1$3002$3203$3404$360Rate10%Required:Modified Internal Rate of Return =?

Q: Rs. Rs. 38, 100 Indirect Labor 9, 420 Sales 30, 000 Sales Retums 35, 725 Purchases of Material 19.…

A: Income Statement is the part of financial statement which shows the net profit or loss earned by the…

Q: Will and Jane Sparks are establishing a college fund for their 1-year-old daughter, Jennifer. They…

A: As per the given information: Amount = $40,000Annualized rate of return (r) = 8%No. of years (n) =…

Q: Asset A B C D E End of Year Cash flow 1 2 3 1 through ∞ 1 23 2 3 4 5 1 through 5 6 1 2 3 4 5 6…

A: 1. To find the value of Asset A , we need to calculate the present value of cash inflow @8%YearCash…

Q: Consider the following proposed cash flows: n Cash Flow 1 Cash Flow 2 Cash Flow 3 Cash Flow 4 Cash…

A: Simple cash flow that where initial cash flows are negative and only one sign change occurs in the…

Q: nabled: Exam 5 Saved Assume that an investment provides the following cash inflows over a three-year…

A: The table that will be used here is the PV of $1 table. PV of cash flow of a year = cash flow amount…

Q: 8. Find the net present value of the cash flows shown below. +200 %5 %8 %10 %12 Semiannually Monthly…

A: Here, Cash Flow in Year 1 is $200 Cash Flow in Year 2 is $60 Cash Flow in Year 3 is -$100 Cash Flow…

Q: 4. The following details are provided by Doppler Company: Initial investment $2,020,000 12% Discount…

A: For cash Outflow The investment year will be considered as 0 year and Present value will be taken as…

Q: b läi 5 Find C that makes the two cash flows of Project A & Project B :over 5 years to be equivalent…

A: Using What if Analysis (Goal seek) In excel

Q: a. Determine the payback period of each project. b. Which project is acceptable based on payback…

A: Payback period = (Year of last negative cash flow+(Absolute value of last negative cash flow/Next…

Q: All techniques, conflicting rankings Nicholson Roofing Materials, Inc., is considering two mutually…

A: The question has asked to compute the NPV, payback period, and IRR. Capital budgeting decision:…

Q: Revenue 11,600,000ExpensesSalaries & Wages 7,600,000Employer NIS Contribution 1,400,000Rent and…

A: Dear student, kindly check the answer in the explanation box below.Explanation:To address the…

Q: Create a income statement and show net cashflow each year for the 4 years so you can use it for…

A: Life of project = 4yearsInitial Investment = $32000Sale price = $26Cost of goods sold =…

Q: Activity 2: Prepare a vertical analysis of DEF Statement of Financial Position and Statement of…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Lläi 5 Find C that makes the two cash flows of Project A & Project B over 5 years to :be equivalent…

A: Interest rate = 10% Cash flow at time 0 = $1,000 Cash flow at time 3 = $500 Total present value of…

Q: Suppose a certain car audio manufacturer receives an order of a certain brand of satellite radios…

A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…

Q: Calculate gross operating cash flow O a. 28 ОБ. 23 O b. OC. О с. 53 O d. 58 e. None of these

A: Capital expenditure can be defined as that expenditure which is going to create benefit for the firm…

Q: solve this cash flow

A: Cash flow refers to the balance of the cash inflows and outflows of a business over a period of…

Q: aläi 5 Find C that makes the two cash flows of Project A & Project B over 5 years to :be equivalent…

A: According to the time value of money concept, a sum of money has different purchasing power at…

Q: Air Scrubbers Furnace Fuel Change: Initial Investment $ 1.350,000 $ 385.000 Annual Net Cash Flows $…

A: Part 2: Explanation:Step 1: Calculate the Present Value of Annual Net Cash Flows:To calculate the…

Q: Determine the unknown from the cash flow diagram shown below. i = 10%. Year 0 1 2 3 4 5 сл $4503…

A: Present value is computed as follows:-PV = wherePV= present valueA= future valuei= interest raten=…

Q: 8. Find the net present value of the cash flows shown below. +200 %5 %8 %10 %12 Semiannually…

A: Assumptions: Timeline given in the question is in years. Interest rates are p.a. effective: i_1 = 5%…

Q: Furchases $250,000 Cost of goods sold 250,000 Eeginning balance 30,000 Ending balance ?

A: Cost of goods sold = Beginning inventory + Purchases - Ending inventory Ending inventory = Beginning…

Q: What is the total amount of liabilities after the formation of the partnership?

A: Total Amount of Liabilities after the Partnership is formed : 2782500

Q: Dept. M $79,000 Dept. T $ 40,000 Dept. N Dept. O Total $ 41,000 Dept. P $60,000 $ 292,000 Sales…

A: Departmental income statement are the income statement prepared by management that shows profit or…

Q: Look at the cash flows for projects F and G given below. Cash Flows ($) Project Co F G Project F…

A: NPV stands for Net Present Value, which is a financial measure that compares the present value of…

Q: i) Calculate the IRR of the project by discounting the cashflows by 4% and 8% and then applying the…

A: IRR: It is the rate at which a project or investment yields zero net present value. Thus, at IRR,…

Q: Payback Machine X Cumulative cash flow Machine Y Cumulative cash flow Investment 1,000,000…

A: In financial management, capital budgeting process is used to evaluate the profitability and…

Q: Relevant Cash Flow Data for Year 2: Sales revenues Year 2 $100,000 Cost of Goods Sold 20,000…

A: Cashflow statement is prepared as per the IAS-7. There are 3 kinds of cash flows: operating,…

Concept explainers

Cash Book

So, before coming to the topic of cash books, I will let you briefly explain about the cash so that you all can be familiar with the word cash. Cash comes under the category of the current asset which is used as a medium of exchange for all the financial transactions in the firm. Cash is something that is universally accepted as a mode of payment. So, now comes to the topic i.e., cash book.

Question

The table titled "Cash Flow" presents a comparison between two projects, E and F, over a six-year period.

- **Cost**:
- Project E: $44,000
- Project F: $90,000

- **Annual Cash Flow**:
- **Year 1**:
- Project E: $9,778
- Project F: $36,000
- **Year 2**:
- Project E: $9,778
- Project F: $27,000
- **Year 3**:
- Project E: $9,778
- Project F: $18,000
- **Year 4**:
- Project E: $9,778
- Project F: $9,000
- **Year 5**:
- Project E: $9,778
- Project F: $0
- **Year 6**:
- Project E: $9,778
- Project F: $0

This table allows for a comparative analysis of the initial costs and the annual cash flows associated with both projects over a six-year timespan.

**Payback Period**

*What are the payback periods of projects E and F in the following table? Assume all the cash flow is evenly spread throughout the year. If the cutoff period is 3 years, which project(s) do you accept?*

---

**What is the payback period for project E?**

____ years (Round to one decimal place.)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting for Cash and cash equivalents

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

None
Year Investment $13,000 $10,000 Cash Inflow $1,000 $2,000 $2,500 $4,000 $5,000 $4,000 $5,000 $4,000 $3,000 $2,000 Determine the Payback Period. 1234567899
5
Chapter 5 Class Activities Which of the following machine to be selected based on Payback period Average rate of return. Sr. Machine A Machine B No. RO. RO. Year Cash outflow/ (50,000.00) Cash outflow/ (50,000.00) 1 6,000.00 15,000.00 2 7,200.00 17,500.00 3 7,350.00 18,000.00 4 8,200.00 5,000.00 5 9,820.00 - 6 10,200.00 - 7 12,500.00 - 61,270.00 55,500.00
Cash Accounts receivable Equipment, net Land Total assets Current Year $7,440 $4,000 44,000 91,680 $197.120 Percent change Prior Year Required: Compute the annual dollar changes and percent changes for each of the following items $8,000 18,000 40,000 66,000 $132.000 (Use cells A2 to C7 from the given information to complete this question. Decreases should be entered with a minus sign. Round your percentage answers to one decimal place.) Cash Accounts receivable Equipment, net Horizontal Analysis Calculation of Percent Change Numerator: Current Year $7,440 54,000 44,000 Prior Year $8,000 18,000 40,000 Denominator: Dollar Change Change
Internal rate of return and modified internal rate of return. Quark Industries has three potential projects, all with an initial cost of $2,100,000. Given the discount rate and the future cash flow of each project in the following table, E, what are the IRRS and MIRRS of the three projects for Quark Industries?
irr?
4. ieff = Blank 1 : show in four decimal X = $ Blank 2 Y = $ Blank 3 Z = $ Blank 4
ok ences Mc Graw Hill Graff, Incorporated, has sales of $50,000, costs of $23,000, depreciation expense of $2,250, and interest expense of $2,000. If the tax rate is 23 percent, what is the operating cash flow, or OCF? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Operating cash flow 2 #3 3 89 $ 4 000 000 % 5 8
Show formula used.
Please help me with all answers thanku
Clearcast Communications Inc. is considering allocating a limited amount of capital investment funds among four proposals. The amount of proposed investment, estimated operating income, and net cash flow for each proposal are as follows: Operating Income Net Cash Flow Investment Year Proposal A: $450,000 $ 30,000 1 $120,000 2 30,000 120,000 3 20,000 110,000 4 10,000 100,000 (30,000) $ 60,000 $ 60,000 40,000 60,000 $510,000 $100,000 Proposal B: $200,000 1 80,000 3 20,000 60,000 4 (10,000) 30,000 (20.000) $ 90,000 20.000 $290,000 (Continued)

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

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

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