Complete this question by entering your answers in the tabs below.Required A Required BCompute payback period for each project. Based on payback period, which project is preferred? (Cumulative net cashoutflows must be entered with a minus sign. Do not round your intermediate calculations. Round your Payback Period answerto 2 decimal places.)YearProject 1Net Cash Flows$ (48,000)Cumulative NetCash FlowsInitial investmentYear 1Year 2Year 3Payback periodProject 1 Payback periodProject 2 Payback periodBased on payback period, which project is preferred?Project 2Net CashFlows$ (72,000)yearsyearsCumulativeNet CashFlows Exercise 24-9 (Algo) Payback period; net present value; unequal cash flows LO P1, P3Gonzalez Company is considering two new projects with the following net cash flows. The company's required rate of return oninvestments is 10%. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)YearInitial investment1.2.3.Net Cash FlowsProject 1$(48,000)12,00029,70021,000Project 2$(72,000)35,00020,00025,000a. 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?

The payback period represents the duration needed to recover the initial investment. A shorter…

Gonzalez Company is considering two new projects with the following net cash flows. The company's required rate of return on investments is 10%. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Year Initial investment 1. 2. 3. Net Cash Flows Project 1 $(48,000) 12,000 29,700 21,000 Project 2 $(72,000) 35,000 20,000 25,000 a. 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?

Gonzalez Company is considering two new projects with the following net cash flows. The company's required rate of return on investments is 10%. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Year Initial investment 1. 2. 3. Net Cash Flows Project 1 $(48,000) 12,000 29,700 21,000 Project 2 $(72,000) 35,000 20,000 25,000 a. 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?

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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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.
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HMT Co is considering a project with the following cash flows. Year Initial investment cost cash inflows Net cash flows Variable (000) RO. (000) RO. (000) RO. (000) RO. 6,000 3,000 7,000 4,000 2 3,000 7,000 4,000 Cash flows arise from selling 750,000 units at RO.12 per unit. HMT Co has a cost of capital of 9%. You are required to calculate the sensitivity % of the variable initial investment. a. 17.27% b. None of the options c. 18.27% d. 16.27%

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