Gossman Corporation is analyzing a capital expenditure that will involve a cash outlay of P104,904. Estimated cash flows are expected to be P36,000 annually for four years. The present value factors for an annuity of P1 for 4 years at interest of 10%, 12%, 14%, and 15% are 3.170, 3.037, 2.914, and 2.855, respectively. The internal rate of return for this investment is?   a. 2% b. 2.4% c. 14% d. 3%

Q: The initial cost of an investment is $65,000 and the discount rate (cost of capital) is 12%. The…

A: Initial Cost = i = $65,000Discount Rate = r = 12%Cash Flow per Year = c = $16,000Time = t = 8 Years

Q: ent value of ordinary annuity of $1: 10% 12% 14% 1 0.909 0.893 2 1.736 1.690 0.877 1.647 2.322 3.170…

A: IRR is the one of the method of capital budgeting based on time value of money and here net present…

Q: Project A costs $4,700 and will generate annual after-tax net cash inflows of $1,800 for five years.…

A: Given: Cost = $4,700 Net cash inflows = $1,800 Period = 5years rate = 12%

Q: An investment project provides cash inflows of $1325 per year for eight yea payback period if the…

A: Year cash flow 1                            1                       1,325.00 2…

Q: An investment will pay $16,700 at the end of each year for eight years and a one-time payment of…

A: Time value of money :— According to this concept, value of money in present day is greater than the…

Q: A project has estimated annual net cash flows of $7,500 for three years and is estimated to cost…

A: Present value index = Present value of net cash inflows / Present value of cash outflows Net Present…

Q: FCF IS $800 in year 1 and $850 in year 2. Cash flows are expected to be earned at the end of each…

A: The present value is the present worth of the amount that will be paid or received at future.

Q: L& T Corporation is considering an investment proposal in which a working capital investment of…

A: Present value (PV) refers to the determination of the value of money at present that is expected to…

Q: your company is considering a project with cash flows of $12450, $19270 and $22390 at the end of…

A: Present value is a concept used in making valuations of financial modeling, stocks, bond pricing,…

Q: Based on the following table, what is the approximate Internal Rate of Return (IRR) for a project…

A: The objective of this question is to calculate the Internal Rate of Return (IRR) for a project based…

Q: . Project 2 has a computed net present value of $26,300 over a 4-year life. Project 1 could be sold…

A: Net present value is one of the most important methods of capital budgeting based on the time value…

Q: A company is considering an iron ore extraction project that requires an initial investment of…

A: The question is related to Capital Budgeting. The Net Present Value is calculated with the help of…

Q: Caldwell Corporation is considering an investment proposal that will require an initial outlay of…

A: Net present value (NPV) :— It is the difference between present value the of net cash flows and…

Q: ABC Company estimated that it can generate $42,000 per year in additional cash inflows for the next…

A: The Present Value of additional cash flows: The Present Value of additional cash flows is computed…

Q: Project 1 requires an original investment of $48,500. The project will yield cash flows of $13,000…

A: For determining the NPV, present value of $13,000 annual flows and $54,000 salvage will be…

Q: Investment A is expected to generate after-tax cash flows of $5,000 per year for 6 years and will…

A: Cross-over rate is the discount rate at which the Net present value (NPV) of two projects is…

Q: A project has estimated annual net cash flows of $7,500 for ten years and is estimated to cost…

A: Net present value(NPV) is the difference between present value of cash inflows and initial…

Q: Park Company is considering an investment of $38,000 that provides net cash flows of $13,800…

A: The payback period is a financial metric that measures the time it takes for an investment to…

Q: Myca Corporation has a project with the following cash flows. What is the value of the cash flows…

A: Net Present Value, which is a financial metric used to determine the value of an investment by…

Q: roject 1 requires an original investment of $54,000. The project will yield cash flows of $8,000 per…

A: Net present value is defined as the summation of the present value of cash inflows in each period…

Q: A certain project requires an immediate cash outflow of $4 million. At the end of each of the next…

A: Net present value represents the present worth of the future cash inflows. It is used to analyze the…

Q: Calculate Internal Rate of Return to the investor based on a sale of the project at 12/31/26 using a…

A: Internal Rate of Return  is a financial metric that measures the potential profitability of an…

Q: A project has estimated annual net cash flows of $11,250 for four years and is estimated to cost…

A: a. Net present value of the projet = Present value of Annual net cash flows - Initial cost = Annual…

Q: A project is expected to cost $4 million today and generate a net after-tax cash flow of $600,000 at…

A: The net present value method is a capital budgeting technique that evaluates a capital investment's…

Q: An investment of $158397 is expected to generate an after-tax cash flow of $94000 in one year and…

A: CF0 = -$158397CF1 = $94000CF2 = $129000

Q: Micheal is considering a capital investment that costs $540,000 and will provide net cash inflows…

A: Answer  Calaculation of Net Present Value(NPV): At first we need to calaculate the present value of…

Q: XMT Corp. expects to receive AED 8 million per year for 8 years and AED 12 million per year for the…

A: We need to use present value of annuity formula to calculate present value of cash flows. PV…

Q: A project has estimated annual net cash flows of $147,000 for 4 years and is estimated to cost…

A: For a given project, NPV and the present value index have to be found. The initial investment is…

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.