CURRENT DATE CURRENT PROJECT BUDGET : 10 JULY 2024 R600 000 ACTIVITY/TAS COMPLETIO BUDGETE CASH ACTUAL COST K N DATE D AMOUNT FLOW SCHEDULE D (BCWP) COST (ACWP) VARIANCE (CVAR/CV) Task a 18/08/2024 R174 000 ??? R186 000 -R12 000 Task b 15/09/2024 ??? R96 000 R96 000 -R6 000 Task c 24/10/2024 R156 000 ??? R156 000 ??? Task d 5/11/2024 R180 000 R168 000 ??? R12 000 TOTAL 17/12/2024 ??? ??? ??? ???
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- AsapModified internal h. Payback period; discounted payback CAPITAL BUDGETING CRITERIA You must analyze two projects, X and Y. Each project costs $10,000, and the firm's WACC is 12%. The expected cash flows are as follows. ST-2 0. 1 2. 4 -$10,000 -$10,000 $3,000 $3,500 $1,000 $3,500 $3,000 Project X Project Y $6,500 $3,500 $3,500 Calculate each project's NPV, IRR, MIRR, payback, and discounted payback. b. Which project(s) should be accepted if they are independent? Which project(s) should be accepted if they are mutually exclusive? d. How might a change in the WACC produce a conflict between the NPV amd IRR rankings of the two projects? Would there be a conflict if WACC were 5%? (Hint: Plot the NPV profiles. The crossover rate is 6.21875%.) a. C. e. Why does the conflict exist?U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Capital investment Annual net income: Total Year 1 (a) 2 Project Bono 3 4 Project Edge 5 Project Bono $160,000 14,000 Project Clayton 14,000 14,000 Click here to view the factor table. 14,000 14,000 $70,000 Project Edge Project Clayton $175,000 $200,000 18,000 17,000 16,000 12,000 9,000 $72,000 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) years 27,000 years 23,000 Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.) years 21,000 13,000 12,000 $96,000
- A capital budgeting project is expected to have the following cash flows: Year Cash Flows 0 -$500,000 1 $300,000 2 $300,000 3 $200,000 4 $100,000 What is the project's net present value at a 12% required rate of return? Group of answer choices $276,475 $225,868 $212,923 $200,373(c) Compute the annual rate of return for each project. (Hint: Use average annual net income in your computation.) (Round answers to 2 decimal places, e.g. 10.50%.) Annual rate of return Project Bono % Project Edge % Project Clayton %Accounting provide a. And. b
- Crane Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Project Bono Project Edge Project Clayton Capital investment $164,000 $180,500 $204,000 Annual net income: Year 1 14,420 18,540 27,810 2 14,420 17,510 23,690 14,420 16,480 21,630 4 14,420 12,360 13,390 14,420 9,270 12,360 Total $72,100 $74,160 $98,880 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) Click here to view the factor table. Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.) Project Bono years Project Edge years Project Clayton yearsCAPITAL BUDGETING CRITERIA You must analyze two projects, X and Y. Each project costs $10,000, and the firm's WACC is 12%. The expected net cash flows are as follows: 1 2 4 Project X Project Y -$10,000 -$10,000 $6,500 $3,500 $3,000 $3,500 $3,000 $3,500 $1,000 $3,500 Calculate each projecť's NPV, IRR, MIRR, payback, and discounted payback. b. Which project(s) should be accepted if they are independent? c. Which project(s) should be accepted if they are mutually exclusive? a. с. How might a change in the WACC produce a conflict between the NPV and IRR rankings of the two projects? Would there be a conflict if WACC were 5%? (Hint: Plot the NPV profiles. The crossover rate is 6.21875%.) e. Why does the conflict exist?Exercise (NPV) - 20 mins Project A, B and C have the following cash-flow projections: Year Project A (S) -10,000 3.000 0 1 2 3 3,000 3.000 3,000 Project B (S) -10,000 1,000 2,000 . 4,000 8,000 Project C (S) -14,000 8,000 8,000 -3,000 -5,000 * Calculate the Payback Period and Net Present Value (NPV) for each of the projects shown. Assume, i=10% Decide which is the best project. Justify! What is the advantages of IRR over NPV as a measure of profitability?
- 3. A. B. C. time Capital Budgeting Project S Project L D. 0 -1000 -1000 1 500 100 2 400 200 3 300 300 4 200 400 5 100 500 USE NPV METHOD, assuming the WACC is 10%. Which project will you invest? Use IRR method, which project will you invest? Assuming WACC is 10%, use MIRR, which project will you invest? Use payback period method, which project will you invest?Crane Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Project Bono Project Edge Project Clayton Capital investment $164,000 $180,500 $204,000 Annual net income: Year 1 14,420 18,540 27,810 2 14,420 17,510 23,690 3 14,420 16,480 21,630 4 14,420 12,360 13,390 5 14,420 9,270 12,360 Total $72,100 $74,160 $98,880 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.)Calculate the net present value (NPV), the return on investment (ROI) and the payback period using a discount rate of 8 percent for the following systems development project. Year Anticipated Annual Benefits Expected Annual Operating Costs Discount Factors at 8 Percent 1 $55,000 $5,000 .9259 $60,000 $5,000 .8573 3. $70,000 $5,500 7938 $75,000 $5,500 7349 $80,000 $7,000 6805 6. $80,000 $7,000 .6301 $80,000 $7,000 5833 8. $80,000 $8,000 .5401 The initial development costs for the system were $225,000.