od Given the following two projects and their cash flows, EE calculate the discounted payback period with a discount rate of 4%, 12%, and 20%. What do youa this relationship.- Xthe cash outflow for project A is: (Select ti Data Tableyears.(Click on the following icon in order to copy its contents into a spreadsheet.)ears.ears.Cash Flowrered.Cost$12,000$110,000Cash flow year 1$4,286$11,000$4.286$22,000Cash flow year 2Cash flow year 3Cash flow year 4Cash flow year 5Cash flow year 6$4,286$33,000$4,286$4,286$44,000$16.500SO$4,286PrintDone Discounted payback period. Given the following two projects and their cash flows,calculate the discounted payback period with a discount rate of 4%, 12%, and 20%. What do you notice about the payback period as thediscount rate rises? Explain this relationship.With a discount rate of 4%, the cash outflow for project A is: (Select the best response.)O A. recovered in 3.03 years.O B. recovered in 3 years.O C. recovered in 5 years.O D. never fully recovered.thon clirk Check Answer

Discounted Payback Payback period is the time period in which initial cost if fully recovered using…

Discounted payback period. Given the following two projects and their cash flows, calculate the discounted payback perlod with a discount rate of 4%, 12%, and 20% What do you notice about the payback period as the discount rate rises? Explain this relationship. With a discount rate of 4%, the cash outflow for project A is: (Select the best response.) O A. recovered in 3.03 years. O B. recovered in 3 years. O C. recovered in 5 years. O D. never fully recovered

Discounted payback period. Given the following two projects and their cash flows, calculate the discounted payback perlod with a discount rate of 4%, 12%, and 20% What do you notice about the payback period as the discount rate rises? Explain this relationship. With a discount rate of 4%, the cash outflow for project A is: (Select the best response.) O A. recovered in 3.03 years. O B. recovered in 3 years. O C. recovered in 5 years. O D. never fully recovered

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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Fernando Designs is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? WACC: 10.75% Year 0 1 2 3 Cash flows - $800 $510 $510 $510 a. 2.18 years b. 1.10 years c. 2.82 years d. 1.82 years e. 1.18 years
The following are the cash flows of 2 projects Year 0, Project A $340, Project B $340 Year 1, Project A $170, Project B $240 Year 2, Project A $170, Project B $240 Year 3, Project A $170, Project B $240 Year 4, Project A $170, Project B Calculate the NPV for both projects if the discount rate is 10% Project A - NPV? Project B - NPV? Suppose that you have can choose only one of these projects. Which would you choose? Project A, B, or niether?
Payback period. What are the payback periods of projects E and F in the following table: ? Assume all the cash flow is evenly spread throughout the year. If the cutoff period is 3 years, which project(s) do you ассept? ..... What is the payback period for project E? years (Round to one decimal place.)
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$ 243,567 -$ 15,530 1 27,200 55,000 60,000 413,000 234 5,173 8,261 13,237 8,729 Whichever project you choose, if any, you require a 6 percent return on your investment. a. What is the payback period for Project A? Payback period
Accounting Draw the cash flow diagram for the given project below and then calculate the project net profit. The following table shows the activities description, dependency, duration, and cost elements. Assume the followings: Project overhead 8%. Tax 3%. Bond 1.25%. Profit 6%. Interest rate 9% per year. Down payment 10% with a guarantee letter, which costs 0.25% per month paid to the bank at the project start date. A performance guarantee letter of 10% will be submitted from contractor at the project begin. Invoices are submitted every month and will be paid a month later. Retention 10% and will be paid at the last invoice. Subcontractors: retention 10% will be paid at the last invoice, down payment 20%. Labor: labor expenses to be paid bi-weekly. Equipment: equipment expenses
Consider the following two projects with cash flows in $: Project Year 0 Year 1 Year Year 3 Year 4 Discount Rate A - 100 40 50 60 n/a 0.15 B -73 30 30 30 30 0.15 For Project A, after two years, the project has been paid off for $90 out of $100. To find out the fraction of the third year, we take the $10 yet to be paid and divide it by $60, which is $10/$60 = 0.167. Therefore, the payback period for Project A is 2.167 years. Following the same logic, calculate the payback period for Project B.
Use the table for the question(s) below. Consider the following two projects: Year 0 Project Cash Flow A - 100 40 50 B - 73 30 30 The payback period for project A is closest to: OA. 2.0 years O B. 2.4 years C. 2.2 years O D. 2.5 years Year 1 Cash Flow Year 2 Cash Flow Year 3 Cash Flow 60 30 Year 4 Cash Flow N/A 30 Discount Rate .15 .15
Se.126.
Given the following information, calculate the Internal Rate of Return (IRR) for the following cash flow. Hint: use linear interpolation method for discount rates 2% and 12%. Project costs and benefits Cash Outflow Year 0 Cash Inflow Year 1 Cash Inflow Year 2 Cash Inflow Year 3 Project -$2580 $977 $930 $955
A project has the following cash flows: Year Cash Flow 0 - 25,400 1 11,620 2 13,810 3 -5, 550 4 7,310 The discounting rate is 13% and the reinvestment rate is 15%. What is the MIRR for this project using the combination approach?
Calculating Discounted Payback An investment project has annual cash inflows of $5,000, $5,500, $6,000, and $7,000, and a discount rate of 12 percent. What is the discounted payback period for these cash flows if the initial cost is $8,000? What if the initial cost is $12,000? What if it is $16,000?
uring the initial cash outflow? For payback period calp pack period for project A? i Data Table nd to one decimal place.) (Click on the following icon in order to copy its contents into a spreadsheet) Cash Flor B. $15,000 S7,500 S7.500 S7,500 S7.500 S7,500 S7.500 $90,000 $36,000 $27,000 $18,000 $9,000 SO Cost Cash flow year 1 Cash flow year 2 Cash flow year 3 Cash flow year 4 Cash flow year 5 Cash flow year 6 $0 Print Done

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