Gonzalez Company is considering two new projects with the following net cash flows. The company's required rate ofreturn on investments is 10%. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tablesprovided.)Net CashYearProject 1FlowsProject 2Initial investment$ (60,000)$ (60,000)1.30,00035,0002.3.30,0005,00020,00020,000a. Compute payback period for each project. Based on payback period, which project is preferred?b. Compute net present value for each project. Based on net present value, which project is preferred?Complete this question by entering your answers in the tabs below.Required A Required BCompute net present value for each project. Based on net present value, which project is preferred? (Round your presentvalue factor to 4 decimals. Round your final answers to the nearest whole dollar.)Net CashFlowsPresent ValueFactorPresent Value of NetCash FlowsProject 1Year 1Year 2

Step 1:Answer: Project 1 Payback Period2years Project 2 Payback Period2.25yearsDecision:…

Answered: Gonzalez Company is considering two new…

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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s. Subect :- Accounting
Following is information on two alternative investments being considered by Jolee Company. The company requires a 12% return from its investments. Project A Project B Initial investment $ (187,325 ) $ (156,960 ) Expected net cash flows in: Year 1 55,000 35,000 Year 2 49,000 48,000 Year 3 79,295 55,000 Year 4 95,400 66,000 Year 5 55,000 27,000 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?
Ingram Electric Products is considering a project that has a WACC of 11% and the following cash flow data. What is the project's MIRR? Year Cash Flow 9.84% 13.50% 8.86% 12.15% O - $800 1 $350 2 $350 3 $350
Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 5% 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 X1 Project X2 Initial investment $ (102,000) $ (164,000) Net cash flows in: Year 1 36,000 76,500 Year 2 46,500 66,500 Year 3 71,500 56,500 a. Compute each project’s net present value.b. Compute each project’s profitability index.c. If the company can choose only one project, which should it choose on the basis of profitability index? Please answer "C" as well. I wasn't able to include that in the images
Following is information on two alternative investments projects being considered by Tiger Company. The company requires a 15% 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 X1 Initial investment $ (100,000) Net cash flows in: Year 1 37,000 Year 2 Year 3 47,500 72,500 Project X2 $ (150,000) 78,000 68,000 58,000 a. Compute each project's net present value. b. Compute each project's profitability index. If the company can choose only one project, which should it choose on th basis of profitability index? Complete this question by entering your answers in the tabs below. Required A Required B Compute each project's net present value. (Round your answers to the nearest whole dollar.) Net Cash Present Value of Present Value of Flows 1 at 15% Net Cash Flows Project X1 Year 1 Year 2 Year 3 Totals Initial investment Net present value $ 0 $ 0 $ 0 Project X2 Year 1 Year 2 Year 3 Totals $ 0 $ EA Initial…
Judson's cost of capital is 12%, what is the project's NPV? Year Cash Flow in $ 0 ($1000) 1 400 2 400 3 600
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 Project B Initial investment $ (180,325 ) $ (140,960 ) Expected net cash flows in: Year 1 49,000 33,000 Year 2 57,000 52,000 Year 3 78,295 67,000 Year 4 87,400 69,000 Year 5 70,000 35,000 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?
Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 4% return from its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Initial investment Project X1 $ (80,000) Project X2 $ (120,000) Net cash flows in: Year 1 25,000 60,000 Year 2 Year 3 35,500 50,000 60,500 40,000 a. Compute each project's net present value. b. Compute each project's profitability index. c. If the company can choose only one project, which should it choose on the basis of profitability index? Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute each project's net present value. Net Cash Flows Present Value of Present Value of Net 1 at 4% Cash Flows Project X1 Year 1 $ 25,000 Year 2 35,500 Year 3 60,500 0.8890 Totals $ 121,000 $ 0 Initial investment (80,000) Net present value $ (80,000) Project X2 Year 1 Year 2 Year 3 Totals…
Rubash Company is considering a project that has the following cash flow and WACC data. What is the project's MIRR? WACC = 9% Year: 0 1 2 3 Cash flows: - $1,500 $400 $525 $940 a. 8.00% b 8.45% c. 8.75% d. 9.33% e. 9.83%
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.
Howell Petroleum, Ic., is trying to evaluate a generation project with the following cash flows: Year Cash Flow -$41,000,000 63,500,000 -16,000,000 1 2 a. If the company requires a return of 12 percent on its investments, what is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Compute the IRRS for this project. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Enter the larger IRR in the first answer box and the smaller IRR in the second answer box. If you can only calculate one IRR, enter it in both boxes to receive partial credit. A negative answer should have a minus sign.) a. NPV b. Larger IRR Smaller IRR % %
Phoenix Company is considering investments in projects C1 and C2. Both require an initial investment of $234,000 and would yield the following annual net cash flows. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Net cash flows Project C1 Project C2 Year 1 $ 14,000 $ 98,000 Year 2 110,000 98,000 Year 3 170,000 98,000 Totals $ 294,000 $ 294,000 a. The company requires a 10% return from its investments. Compute net present values using factors from Table B.1 in Appendix B to determine which projects, if any, should be accepted.b. Using the answer from part a, is the internal rate of return higher or lower than 10% for (i) Project C1 and (ii) Project C2? Hint: It is not necessary to compute IRR to answer this question.

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