Abc Firefox Company is considering the following investmentproposal:Initial investment:Depreciable assets (straight-line) $36,000Working capital$4,000Operations (per year for 4 years):Cash receipts$25,000Cash expenditures$11,000Disinvestment:Salvage value of equipment$3,000Recovery of working capital$4,00010%Discount rateAdditional information for an interest rate of 10% and four-timeperiods:Present value of $10.68301Present value of an annuity of $1 3.16987What is the net present value for the investment?a. $4,781b. $18,322c. $44,378d. $9,159

The question requires the determination of the NPV. Net present value (NPV) is the difference…

Answered: Firefox Company is considering the…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 8P

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Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the following cash flows over the next five years: $99,000, $88,000, $92,000. $87,000, and $72,000. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return in Excel. see Appendix C.
Consolidated Aluminum is considering the purchase of a new machine that will cost $308,000 and provide the following cash flows over the next five years: $88,000, 92,000, $91,000, $72,000, and $71,000. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return in Excel, see Appendix C.
Explorer Company is considering the following investment proposal: Initial investment: Depreciable assets (straight-line) $28,800 Working capital 3,200 Operations (per year for 4 years): Cash receipts $20,000 Cash expenditures 8,800 Disinvestment: Salvage value of equipment $2,400 Recovery of working capital 3,200 Discount rate: 10 percent Additional information for interest rate of 10 percent and four time periods: Present value of $1 0.68301 Present value of an annuity of $1 3.16987 What is the net present value for the investment? Select one: a. $14,658 b. $35,503 c. $3,825 d. $7,327
What is the net present value for the investment? Of this accounting question
Assume that a company Is consideringa capital Investment project with a four-year time horizon and the following cash flows: Cost of new equipment Working capital required Annual net cash inflows Maintenance and repairs in third year Salvage value of equipment in fourth year $ 210,000 $ 50,000 $ 100,000 $40,000 $ 35,000 Click here to vlew Exhlbit 14B-1 and Exhibit 14B-2, to determine the approprlate discount factor(s) using the tables provided. The working capital will be released at the end of the project and the company's required rate of return Is 17%. The net present value of the project Is closest to: Multiple Choice $34,830. $44.730. $(30,530). $60.730.
Tiberius Manufacturing is considering two alternative investment proposals with the following data: Proposal X Investment $10,800,000 Useful life. Estimated annual net cash inflows for 5 years 5 years $2,160,000 Residual value $60,000 Depreciation method Straight-line Required rate of return 14% Calculate the accounting rate of return for Proposal Y. (Round any intermediate calculations and your final answer to two decimal places.) OA. 13.90% OB. 11.56% OC. 17.83% OD. 7.58% Proposal Y $440,000 5 years $99,000 $35,000 Straight-line 13%
Subject- account
Oriental Corporation has gathered the following data on a proposed investment project: Investment in depreciable equipment $ 450,000 $ 90,000 Annual net cash flows Life of the equipment 10 years Salvage value Discount rate 53 $ 0 7% The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the investment would be: (Round your answer to 1 decimal place.) Multiple Choice 0.2 years < Prev 5 of 5 Lavext a nere to search acer 立

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Staple Company is considering two capital investment proposals. Estimates regarding each project are provided below: Project Beans Project Rice Initial investment Annual net income Net annual cash flow Estimated useful life Salvage value Periods 5 6 9% The company requires a 10% rate of return on all new investments. Present Value of an Annuity of 1 11% 12% 3.890 4.486 10% 3.791 $400,000 4.355 20,000 100,000 5 years -0- 3.696 4.231 $600,000 42,000 142,000 6 years -0- The net present value for Project Rice is 3.605 4.111
Sammy Corporation is considering two alternative investment proposals with the following data: Proposal A Proposal B Investment $850,000 $468,000 Useful life 8 years 8 years Estimated annual net cash inflows for 8 years $125,000 $78,000 Residual value $40,000 $ — Depreciation method Straight-line Straight-line Required rate of return 14% 10% Using a financial calculator, determine the internal rate of return for Proposal A? (Ignore taxes) Select one: a. 2.88 % b. 14.71 % c. 4.57 % d. 2.79%

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