Figure 2 shows the payments and revenues of a small project. If M.R.R.R= % 12, Evaluate the project economically using A.W method $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $2,500 0 2 3 $20,000 $500 $1,000 $1,500 $2,000 $2,500 6 $3,000 $3,90gure 2

Figure 2 shows the payments and revenues of a small project. If M.R.R.R= % 12, Evaluate the project economically using A.W method $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $2,500 0 2 3 $20,000 $500 $1,000 $1,500 $2,000 $2,500 6 $3,000 $3,90gure 2

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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Concept explainers

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.

Question

Figure 2 shows the payments and revenues of a small project. If M.R.R.R= %12, Evaluate the
project economically using A.W method
$4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
$2,500
0
3
$500
$20,000
$1,000
$1,500
$2,000
$2,500
6
$3,000
$3,90gure 2

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Consider a project with the following cash flows: Time 0 1 2 3 4 5 CF -$5,000 $5,000 $4,000 $2,000 $1,000 -$6,000 Please round your answer to two decimal places. (e.g. 12345.67 for $12,345.67; 12.34 for 12.34%) a) What is the NPV of this project if the cost of capital is 10%? b) To calculate the MIRR, find the modified cash flow at year 0 c) What is the MIRR of this project?
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The following are the cash flows of two projects: Year 2234O 0 1 Project A $ (380) 210 210 210 210 Project B $ (380) 280 280 280 If the opportunity cost of capital is 11%, what is the profitability index for each project? Note: Do not round intermediate calculations. Round your answers to 4 decimal places. Project A B Answer is complete but not entirely correct. Profitability Index 1.7145 X 1.8006
10. The current project earns $100,000 and has costs of $50,000. A ne project would earn $150,000 and have costs of $75,000. What is the differential cost of the projects? a. $25,000 b. $50,000 c. 0 d. $125,000
The profitability analysis of three projects is provided below: Project A Project B Project C NPV $10,000 $5,000 - $1,000 IRR 10% 15% 15% WACC 8% 12% 16% If these projects were independent, which project(s) would be accepted? Why? If these projects were mutually exclusive, which project(s) would be accepted? Why?
The following economical indictors are referring to types of project (A and B). Answer the following points according to these given indictors in the tables. project A:r=8% project B: r=8% year cash flow (CF) year cash flow (CF) -598 -384 1 110 1 105 170 105 3 210 3 95 320 4 118 A) If you are aware that( r%) percentages are various for different reasons to be (10% and 20%). So determine level of NPV during your analysis procedures for whole the mentioned cases of (% r) for each project? B) Which one of the mentioned project are more economically by using concept of IRR and take the range of (% r) between (9% to %25) for supporting your answers? C) Drawing out all the levels of various of the project for each cases of (r %) which given initially in point (A) above. D) Give clear justification about any of the above project more feasible?

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