Gomez is considering a $235,000 Investment with the following net cash flows. Gomez requires a 12% return on its Investments. (PV of$1, FV of $1. PVA of $1, and FVA of $1)Note: Use appropriate factor(s) from the tables provided.Net cash flowsYear 1$72,000Year 2$49,000Year 3Year 4$90,000$129,000Year 5$51,000(a) Compute the net present value of this Investment.(b) Should Gomez accept the Investment?Complete this question by entering your answers in the tabs below.Required ARequired BCompute the net present value of this investment.Note: Round your answers to the nearest whole dollar.Net CashYearFlowsPresentValue of 1at 12%Present Valueof Net CashFlowsYear 1Year 2Year 3Year 4Year 5TotalsInitial investmentNet present value< Required ARequired B >

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Answered: Gomez is considering a $235,000…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Following is information on two alternative investments being considered by Jolee Company. The company requires a 8% return from its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Project A $(171,325) Project B $(159,960) Initial investment Expected net cash flows in: 35,000 59,000 55,000 Year 1 54,000 45,000 87,295 81,400 65,000 Year 2 Year 3 73,000 20,000 Year 4 Year 5 a. For each alternative project compute the net present value. b. For each alternative project compute the profitability index. If the company can only select one project, which should it choose? Complete this question by entering your answers in the tabs below. Required A Required B For each alternative project compute the net present value.
Jiminez Company has two investment opportunities. Both investments cost $5,000 and will provide the following net cash flows: Year 1 2 3 4 What is the total present value of Investment A's cash flows assuming an 10% minimum rate of return? Use Appendix Table 2. (Do not round your intermediate calculations. Round your answer to the nearest whole dollar.) Multiple Choice O O Investment A $3,000 3,000 3,000 3,000 O O $4,510. $3,452. $3,000. Investment B $3,000 4,000 2,000 1,000 $10,628.
s
Dalvi Incorporated is considering a new Investment. The table below lists the cash flows. Year Cash Flows -$25,400 1 $6,300 2 $7,700 3 $11,400 Calculate the Payback period Calculate the NPV and IRR. Assume that the interest rate is 0%.
Vikrambhai
Alonso Yards Corp. is considering an investment opportunity with the following expected net cash inflows: Alonso Yards Corp. Year 1 $203,000 Year 2 $185,000 Year 3 $106,000 The company uses a discount rate of 9%, and the initial investment of $380,000. Calculate the NPV of the investment.
J&R Wealth is considering an investment with the following cash flow: EOY Cash Flow - $500,000 $92,500/year $50,000 1-10 10 If MARR is 12%, what is the ERR? Is this project acceptable?
Suppose the MARR is 3%. Use the following table to answer the question--The IRR on the incremental cash flow is. CMS FMS Initial Investment $30,000 $39.000 Annual Revenue 6,688 9,102 I Useful Lite (Years) 5 5 OA. 1.0% 2.0% OB. 15.0% 16.0% OC. 20.0% 21.0% OD. 17.0% - 18.0% E. 10.0% 11.0%
1a.Compute the net present value of this investment.b. Should Beyer accept the investment?
Mendez Company has identified an investment project with the following cash flows. Year Cash Flow 1 $ 1,150 2 1,030 3 1,520 4 1,880 If the discount rate is 11 percent, what is the present value of these cash flows? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. What is the present value at 16 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. What is the present value at 22 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
Consider a proposal for a capital investment worth $6,000. Theannual revenues and expenses are $1850 and $500 respectively.Estimated market value of the investment is $1200 at the endof 10 years. Determine how sensitive the decision to invest interms of the capital investment. Draw the cash flow diagram.
Annual cash inflows from two competing investment opportunities are given below. Each investment opportunity will require the same initial investment, $50,000. The firm´s required rate of return on investments is 10%. YEAR INVESTMENT A INVESTMENT B 1 $10,000 $ 18,000 2 15,000 10,000 3 20,000 32,000 4 35,000 20,000 Total Cash Inflows $80,000…

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