Compute Discounted Payback Period, Net Present Value and Profitability Index of a project which costs Rs 50,000, cost of capital is 8% and is expected to generate following cash inflows:Year Cash inflows(Rs) 1 12,000 2 15,000 3 25,000 4 28,000 5 20,000 6 22,000 On the basis of Net Present Value and Profitability Index, suggest if the project is to be accepted or not.

Q: A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the…

A: IRR stands for internal rate of return. It is an important capital budgeting metric. It is the rate…

Q: What is Project A’s modified internal rate of return (MIRR)? Use 5 decimal places for the factors…

A: Modified internal rate of return is the rate at which the value of latest cash inflow is equal to…

Q: Jeans LLC has a project with the following cash flows . Its required rate of return is 5 % , Year…

A: Internal rate of return ( IRR ) is the discount rate which equates present value of all cash…

Q: if the cash flow for project Z are C0= -1,000, C1= 600, C2= 720, C3= 2,000 calculate the discounted…

A: Discounted payback period is the period within which accumulated discounted cash flow becomes equal…

Q: Consider two investments with the following sequences of cash flows: (a) Compute the IRR for each…

A: Given information:

Q: Evaluate the following investment project according to the Discounted Payback Period (DPP) and…

A: Information Provided: WACC = 21%

Q: A project will generate the following cash flows. The required rate of return is 15%. If the…

A: Profitability index: Profitability is computed by dividing the present value of cash inflow to…

Q: QUESTION 3. NPV, and advise the management whether it should be accepted or rejected. The weighted…

A: Discounted payback period and net present value are the common capital budgeting techniques which…

Q: You are given the following decision tree representing the cash flows for a project (conditional…

A: Internal rate of return (IRR) is the discount rate of a project which makes its NPV=0. It is a…

Q: Consider a project with the following cash flows: End of Year (n)          Cash Flows ($)0…

A: Capital budgeting indicates the evaluation of the profitability of possible investment and projects…

Q: Your firm uses the IRR method and asks you to evaluate the following mutually exclusive projects:…

A: Net Present Value = (Present Value of Cash Inflows - Present Value of Cash Outflows)   Formula for…

Q: Compute the discounted payback statistic for project C if the appropriate cost of capital is 7% and…

A: Discounted Payback(PB) Period shows the time period in which present values(PV) of all cash inflows…

Q: 1.3 Using the projected cash flows project A, B and C respectively, calculate the NPV of each…

A: Let CFn = Cashflow in year n r = 12%

Q: Consider the following two mutually exclusive projects (W and Z). -The table- Whichever…

A: Payback period is time period in which original investment amount can be recovered. A lower payback…

Q: A project has the following cash flows :   Year Cash Flows 0 −$11,100   1 4,750   2 6,820   3 4,320…

A: Step 1 The modified internal rate of return (MIRR) is a monetary indicator of how appealing an…

Q: Estimated cash inflows for project A are as follows , respectively ; $ 10.000 , 7.000…

A: Profitability index method does not consider lives of the project. Profitability index method…

Q: KUST is evaluating project on basis of internal rate of return (IRR) and below project Z is under…

A: The question is based on the concept of Project Valuation

Q: A project has the following cash flows: Year Cash Flows 0 -$ 11,100 1 4,750 8 234 4 6,820 4,320…

A: To calculate the Modified Internal Rate of Return (MIRR) using the discounting approach, we first…

Q: Compute the IRR, NPV, PI, and payback period for the following two projects.  Assume the required…

A: Given,  Cashflows of Project A Cashflows of project B

Q: A project has the following cash flows: Year Cash Flow 0-22,500 1 12,310 22,760 3 4, 900 4 9, 870…

A: Modified Internal rate of return is a financial measure used to evaluate the profitability of an…

Q: a. Compute the project's NPV if cash flows occur at the ends of the respective years b. Compute the…

A: Net present value is determined by deducting the current value of cash flows from the initial…

Q: Cannonier, Inc., has identified an investment project with the following cash flows: Year Cash Flow…

A: In this question we need to compute the future value after 4 years.

Q: A firm evaluates all of its projects by using the NPV decision rule. Year Cash Flow 0 -$31,000 1…

A: Here, YearReturns0 $(31,000.00)1 $21,000.002 $12,000.003 $…

Q: Prepare a cashflow forecast, Use investment appraisal techniques to calculate Net Present Value…

A: Net Present Value=(Present Value of Cash Inflows-Present Value of Cash Outflows)

Q: Profitability index.   Given the discount rate and the future cash flow of each project listed in…

A: PI formula: PI=PV of future cashflowinitial investment

Q: ) Consider the following project: Year                              Cash Flow 0 – $ 3,024…

A: Internal rate of return (IRR) is a metric used by corporations to determine the rate of return on…

Q: Consider the cash flows for the investment projects given in Table. Assume that the MARR - 10%. (a)…

A: The Internal Rate of Return(IRR) can be calculated using the IRR function in Excel.

Q: 2. For the net cash flow series shown, find the external rate of return using the ROIC method at an…

A: For calculation external rate of return, first we need to discount the outflows at rate of…

Q: A project with the following cash flows received each year and with a required return of 8%. With…

A: Discounted Payback Period, Net Present Value, and Profitability Index all are capital budgeting…

Q: You are given the following cash flow information for a project. Given this information, and…

A: Excel calculation with formula:

Q: The net cash flow per year for the investment projects A and B, is presented in the table below.…

A: NPV is the Net Present value of the project and is the sum of the present value of all cash inflows…

Q: A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the…

A: We have given cash flow of 4 years, By using IRR formula in excel we found IRR is,   IRR = 15.53 %…

Q: Given the following cash flows for project X and project Y, Year Project X Project Y 0 -55000…

A: Here, Year Project X Project Y 0 -55000.00 -100000.00 1 20000.00 15000.00 2 13500.00…

Q: Calculate/estimate the IRR(s) for a 6-year project with the following cash flows: CF0 = -50, CF1 =…

A: The IRR of a project refers to the maximum return for which the project remains profitable. It uses…

Q: Consider the two mutually exclusive investment projects given in the table below for which MARR =…

A: The internal rate of return (IRR) is the rate of return that equates the present value of future…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.