Exercise Drill No. 1: Return of capital and Return on capital Indicate the amount representing return of capital or return on capital: Return OF Capital Consideratio Return ON For the loss of Capital P 1,000,000 Health P 500,000 P 400,000 car P 300,000 P 350,000 building 600,000 Income P 1.200.000 Life 1. 2. 3. 4. 5.
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- Question content area top Part 1 (Related to Checkpoint 6.6) (Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: Investment Alternatives End of Year A B C 1 $ 14,000 $ 14,000 2 14,000 3 14,000 4 14,000 5 14,000 $ 14,000 6 14,000 70,000 7 14,000 8 14,000 9 14,000 10 14,000 14,000 (Click on the icon in order to copy its contents into a spreadsheet.) Assuming an annual discount rate of 15 percent, find the present value of each investment. Question content area bottom Part 1 a. What is the present value of investment A at an annual discount rate of 15 percent?…Use the values in Table A-1 to complete table A-2(show formula too)Consider the following sets of investment projects n(years) A($) B($) C($) D($) 0 -3,500 -5,800 -5,200 -40,000 1 600 3,000 2,000 12,000 2 600 2,000 4,000 14,000 3 1,000 1,000 2,000 18,000 4 1,000 500 4,000 18,000 5 1,000 500 2,000 14,000 Compute the equivalent annual worth of each project at i=10% and determine the acceptability of each project.
- D Open recovered wor x✓ fx 0 A B C D E F OMEGA PROJECT CASH FLOW INFORMATION Year Inflow Outflow = Newflow 0 1 2 3 G -$225,000 -$190,000 $150,000 $190,000 $215,000 $175,000 $197,000 $70,000 $582,000 $225,000 0 $190,000 $150,000 0 $220,000 $30,000 4 $215,000 0 5 $205,000 $30,000 6 $197,000 0 7 $100,000 $30,000 Total $1,087,000 $505,000 Required ROI 18% Project Omega NPV (Year 0) Project Omega Total NPV Which of the two projects would you fund and why? ▶ 3T Company Data + Ready have on project selection? (Reference Section 2.4, pg 38-39) 19 MAY 910 30 H NPV I K L M N O ALPHA PROJECT CASH FLOW INFORMATION Year Inflow Outflow = 0 1 $50,000 2 $150,000 3 $250,000 4 $250,000 5 $200,000 6 $180,000 7 $120,000 Total $ 1,200,000 Required ROI Project Alpha NPV (Year 1). Project Alpha NPV 1 tv $300,000 $100,000 0 $50,000 0 $50,000 0 $30,000 $530,000 18% d P Newflow -$300,005 -$50,000 $150,000 $200,000 $250,000 $150,000 $180,000 $90,000 $670,000 A Q NPVQ22 The amount spent on training and developing human resources increase its efficiency so it is either ______ and shown in the balance sheet or ____________ and shown in the Profit & loss account. a. Calculated ; Appreciated b. Computed; Depreciated c. Capitalized; Amortized d. None of theseQuestion 6 Investing activities include the (select the best answer): OA Sale of short-term investments other than cash equivalents. O B. All answers are correct. Oc Sale of plant assets. O D. Purchase of plant assets. Moving to another question will save this response.
- How do i do PR 25-1A?According to the information given in the table below, which of the following is cash flow from investing activities? Increase in building 55000 Decrease in machinery 73000 Decrease in land 44000 Increase in LT investment 23000 Increase in prepaid insurance 19000 Select one: O a. 36000 O b. 32000 О с. 39000 O d. - 25000Hh1.
- Quèstion 8 Investing activities include the (select the best answer): O A. Sale of plant assets. O B. Purchase of plant assets. OC. Sale of short-term investments other than cash equivalents. O D. All answers are correct.Problems 1. The capital investment committee of Taiwan Semiconductor Company is considering two capital investments. The estimated income from operations and net cash flows from each investment are as follows: 123 45 Year Total Lithography Machine Income from Operations $26,000 21,000 7,000 4,000 Problem 1 Instructions 1,450 $59,450 Net Cash Flow a. Compute the following: i. ii. $41,000 35,000 22,500 18,000 16,150 $132,650 Photoresist Machine Income from Operations $12,250 12,250 12,250 12,250 12,250 $61,250 Net Cash Flows Each project requires an investment of $75,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 12% for purposes of the net present value analysis. $25,250 25,250 25,250 25,250 25,250 $126,250 The average rate of return for each investment. The net present value for each investment. Use the present value of $1 table appearing in this chapter (Exhibit 2). (Round present values to the nearest dollar.) b.…Question 1 (at home, to practice) You have been asked by Transport for London Ltd. to design a new and more efficient component for the signaling system of the London Underground. The engineers and other experts you consulted have come up with four possible projects for its production. All costs and revenues for the two possibilities are represented by the patterns of after-tax cash flows as follow (assume no uncertainty): Projects Initial investment Cash flow Cash flow Cash flow Cash flow Cash flow Year A. B. 012345 A Air wir Nó -9 2 2.5 3.5 4 B 9453 -9 3.5 2.5 C -9 ن من من من من 3 3 3 D -9 0.7 0.7 0.7 0.7 forever For all projects, the appropriate cost of capital is 6%. Calculate the Net Present Value for each project using the most appropriate formulae. [Practice using Excel for your calculations, although of course for the exam you will not have Excel!]. Which project would you choose and why? Project D seems the best project because it generates positive cash flows forever. Do your…