Compute the payback statistic for Project B if the appropriate cost of capital is 13 percent and the maximum allowable payback periodis three years.Project BTime:01234Cash flow: -$ 11,800 $ 3,430 $ 4,340 $ 1,680$ 05$ 1,160Should the project be accepted or rejected?Note: If the project never pays back, then enter a "O" (zero).PaybackShould the project be accepted or rejected?years Compute the NPV statistic for Project U if the appropriate cost of capital is 11 percent.Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answerto 2 decimal places.Project UTime:012345Cash flow: -$ 2,500 $ 750 $ 2,480 -$ 720$ 700-$300NPVShould the project be accepted or rejected?(Click to select)es✓

Answer:The NPV for Project U is -$182.67.Explanation:Step 1: Understanding NPVNet Present Value…

Answered: Compute the payback statistic for…

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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Similar questions

Compute the payback statistic for Project A if the appropriate cost of capital is 7 percent and the maximum allowable payback period is four years. (Round your answer to 2 decimal places.) Project A Time: 0 1 2 3 4 5 Cash flow: −$1,400 $510 $600 $600 $380 $180 Payback years: _______.__
If a copy center is considering the purchase of a new copy machine with an initial investment cost of $145,800 and the center expects an annual net cash flow of $18,000 per year, what is the payback period? years
(Discounted payback period) Gio's Restaurants is considering a project with the following expected Project Cash Flow (millions) $(210) 85 80 85 4 110 (Click on the icon in order to copy its contents into a spreadsheet.) If the project's appropriate discount rate is 13 percent, what is the project's discounted payback period? Year 0 1 23 The project's discounted payback period is years. (Round to two decimal places.)
Pitt Company is considering two alternative investments. The company requires a 12% return from its investments. Neither option has a salvage value. Project X Project Y Initial investment $241,666 $181,884 Net cash flows anticipated: Year 1 81,000 36,000 Year 2 59,000 55,000 Year 3 93,000 73,000 Year 4 80,000 68,000 Year 5 75,000 27,000 A. Compute the IRR for both projects using the IRR spreadsheet function. Project X fill in the blank 1% Project Y fill in the blank 2% B. Which project should be recommended.
7. The NPV and payback period What information does the payback period provide? Suppose Praxis Corporation's CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost; however, she does know that the project's regular payback period is 2.5 years. Year Cash Flow Year 1 $350,000 Year 2 $475,000 Year 3 $475,000 Year 4 $400,000 If the project's weighted average cost of capital (WACC) is 10%, what is its NPV? $278,324 $333,989 $292,240 $236,575 Which of the following statements indicate a disadvantage of using the discounted payback period for capital budgeting decisions? Check all that apply. ☐ The discounted payback period does not take the project's entire life into account. The discounted payback period does not take the time value of money into account. The discounted payback period is calculated using net income instead of cash flows. ☐
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 7 percent and the maximum allowable discounted payback period is three years. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project C Time: 0 1 2 3 4 5 Cash flow: −$2,500 $1,080 $930 $970 $600 $400 Should the project be accepted or rejected?multiple choice accepted rejected
Pitt Company is considering two alternative Investments. The company requires a 12% return from its Investments. Neither option has a salvage value. Project X Project Y $243,046 $175,883 Initial Investment Net cash flows anticipated: Year 1 Year 2 Year 3 Year 4 Year 5 82,000 60,000 91,000 82,000 75,000 A. Compute the IRR for both projects using the IRR spreadsheet function. Project X Project Y B. Which project should be recommended. Project X ✓ % % 35,000 54,000 73,000 69,000 26,000
4 Compute the payback statistic for Project B if the appropriate cost of capital is 12 percent and the maximum allowable payback period is three years. (If the project never pays back, then enter a "O" (zero).) Project B Time: 1 2 3 4 5 Cash nts $3,470 $4,420 $1,760 $0 $1,240 flow: $12,200 Payback Print years eferences Should the project be accepted or rejected? асcepted O rejected
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 8 percent and the maximum allowable discounted payback period is three years. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project C Time: 1 3 4 Cash flow: -$1,900 $840 $750 $790 $480 $280 Discounted payback period years Should the project be accepted or rejected?
A project that provides annual cash flows of $11322 for eight years costs $80145 today. At what discount rate would you be indifferent between accepting the project and rejecting it? (Enter your answer as a percentage, omit the "%" sign in your response, and round your answer to 2 decimal places. For example, 0.12345 or 12.345% should be entered as 12.35.)
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 6 percent and the maximum allowable discounted payback period is three years. Note: Do not round intermediate calculations and round your final answer to 2 decimal places. Project C 0 1 2 3 Time: Cash flow: -$3,000 $1,280 $ 1,080 $ 1,120 Discounted payback period years Should the project be accepted or rejected? 4 $ 700 5 $ 500
You must decide firm which of the proposed projects should be accepted for the upcoming year since only $6 million is available. Which projects should be accepted? Project Cost (millions) NPV(millions) A 3.25 0.80 В 1.75 0.52 C 4.5 0.69 D 3.75 0.95 E 1.25 0.25 F 0.50 0.25

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