CII, Incorporated, Invests $700,000 in a project expected to earn a 9% annual rate of return. The earnings will be reinvested in the project each year until the entire Investment is liquidated 11 years later. What will the cash proceeds be when the project is liquidated? PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your "FV of a single amount" to 4 decimal places and final answer to the nearest whole dollar.) Present Value f (FV of a Single Amount) Future Value

CII, Incorporated, Invests $700,000 in a project expected to earn a 9% annual rate of return. The earnings will be reinvested in the project each year until the entire Investment is liquidated 11 years later. What will the cash proceeds be when the project is liquidated? PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your "FV of a single amount" to 4 decimal places and final answer to the nearest whole dollar.) Present Value f (FV of a Single Amount) Future Value

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

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XYZ is evaluating a project that would last for 3 years. The project's cost of capital is 15.60 percent, its NPV is $43,200.00 and the expected cash flows are presented in the table. What is X? Years from today 0 1 2 3 Expected Cash Flow (in $) -55,800 71,000 -15,900 X O An amount less than $43,200.00 or an amount greater than $82,666.00 O An amount equal to or greater than $70,205.00 but less than $82,666.00 O An amount equal to or greater than $60,505.00 but less than $70,205.00 O An amount equal to or greater than $53,257.00 but less than $60,505.00 O An amount equal to or greater than $43,200,00 but less than $53,257.00 M
Company A is considering two investment projects, Project X and Project Y. The initial investments and projected annual cash flows for each project are as follows: Project X: Initial Investment: $10,000 Annual Cash Flows: $2,500 for 5 years Project Y: Initial Investment: $15,000 Annual Cash Flows: $5,750 for 3 years Using the roll-over method, determine which project should be selected. Assume a 6% discount rate. The NPV of the preferred project is??
Duo Corporation is evaluating a project with the following cash flows: Year 0 1 2 3 4 5 Cash Flow -$ 15,300 6,400 7,600 7,200 6,000 -3, 400 The company uses an interest rate of 9 percent on all of its projects. Calculate the MIRR of the project using all three methods. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Discounting approach Reinvestment approach Combination approach % % %
FYT Inc estimates that a new project with conventional cash flows will generate an NPV of $500,000. What is the project's profitability index given that the required investment is $3.12 million? Enter index rounded to the nearest hundredth, as in "1.01"
Badr & Sons. is evaluating 2 (TWO) mutually exclusive investment projects. INITIAL CAPITAL OUTLAY for both projects are as stated in Year 0. The company’s REQUIRED RATE OF RETURN IS 10.50% and sets 2.5 YEARS AS ITS MINIMUM (DESIRED) PAYBACK PERIOD. Information about cash flows from the project for the next four years is tabulated below: YEAR PROJECT ALPHA PROJECT BETA 0 SR -185,000 SR -145,000 1 45,000 41,000 2 75,000 45,000 3 55,000 55,000 4 66,000 70,000 What is PAYBACK PERIOD for PROJECT ALPHA ONLY.?
The Company invests $710,000 in a project expected to earn a 9% annual rate of return. The earnings will be reinvested in the project each year until the entire investment is liquidated 12 years later. What will the cash proceeds be when the project is liquidated? (PV of $1. FV of $1, PVA of $1, and FVA of $1) (Use approprlate factor(s) from the tables provided. Round the Table Factors to 4 decimal places and final answer to the nearest whole dollar.) f (FV of a Single Amount) Present Value Future Value
Project Z has an initial investment of $67,945.00. The project is expected to have cash inflows of $23,849.00 at the end of each year for the next 13.0 years. The corporation has a WACC of 9.96%. Calculate the NPV for project Z.
Blossom Company accumulates the following data concerning a proposed capital investment: cash cost $217,280, net annual cash flows $44,000, and present value factor of cash inflows for 10 years is 5.22 (rounded). (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45).) Determine the net present value, and indicate whether the investment should be made. Net present value 24 The investment be made.
Kelli is considering a project that would last for 3 years and have a cost of capital of 10.98 percent. The relevant level of net working capital for the project is expected to be $9,620.00 immediately (at year 0); $30,700.00 in 1 year; $27,500.00 in 2 years; and $8,520.00 in 3 years. Relevant expected operating cash flows and cash flows from capital spending in years 0, 1, 2, and 3 are presented in the following table. What is the net present value of this project? Operating cash flows Year 0 $0.00 Year 1 Year 2 Year 3 $52,500.00 $52,500.00 $52,500.00 Cash flows from capital spending -$97,700.00 $0.00 $0.00 $7,800.00 O $99,678.69 (plus or minus $10) $84,352.32 (plus or minus $10) O $114,320.23 (plus or minus $10) $24,215.27 (plus or minus $10) None of the above is within $10 of the correct answer
Jones expects an immediate investment of $73,759.50 to return $15,000 annually for six years, with the first payment to be received one year from now. What rate of interest must Jones eam? (PV of $1. EV of $1. PVA of $1. and EVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.) Table Factor Interest Rate Present Value Annuity Payment
Emusk Inc. is evaluating two mutually exclusive projects. The required rate of return on these projects is 8%. Calculate the profitability index for project A. (Round to 3 decimals) Year 0 1 2 3 4 5 Project A -15,000,000 2,000,000 3,000,000 5,000,000 5,000,000 6,000,000 Project B -15,000,000 6,000,000 6,000,000 6,000,000 1,000,000 1,000,000
Citrus Company is considering a project with estimated annual net cash flows of $28,755 for nine years that is estimated to cost $135,000 Citrus's cost of capital is 11 percent. Required: 1. Determine the net present value of the project. (Future Value of $1, Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1.) 2. Based on NPV, determine whether project is acceptable to Citrus. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the net present value of the project. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign. Round your final answer to 2 decimal places. Net Present Value Show less A

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