iii) Supera Ltd has a set hurdle rate of 7.5% for projects. Assess whether or not it should accept the project based on your calculations and other information provided. iv) Explain one advantage and one disadvantage of the IRR technique of investment appraisal.
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part 3 4 solution needed
Year | Net cashflows |
0 | -575,000 |
1 | £125,000 |
2 | £248,000 |
3 | £176,000 |
4 | £146,000 |
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- Problem 6. Justine Global Info Tech records the following cash flows at the end of each year for a project. If the firm's discount rate is 11%, what is the PRESENT VALUE of the project? Year Cash Flow 1 P794,633.00 P542,149.00 P836,200.00 P716,080.00 P520,354.00 2 3 4 5Baltusrol Inc. has the following three investment opportunities. A P70,000 10,000 B Initial investment Initial working capital required Cash inflows by year: Year 1 P70,000 5,000 P70,000 8,000 P35,000 35,000 10,000 5,000 8,000 P83.000 P1,250 P35,000 10,000 45.000 20,000 2,000 P112.000 P10,000 P4,000 8,000 10,000 98,000 5.000 P125.000 P12,500 Year 2 Year 3 Year 4 Released working capital Total Average annual income Required: 1. Rank the investment opportunities in order of desirability using. A. Payback period. B. Average book rate of return (use average net book value of the investment as the denominator), and C. NPV using a 16% discount rate. 2. Determine the profitability index for each opportunity and rank the investments based on these values.For a project with the following set of cash flows, what is the payback period? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Year Cash Flow 1 07234 -$5,800 1,450 1,650 2,050 1,550 Payback period years < Prev 6 of 24 Nex CUCUECAA MacBook Air
- A Ltd. is considering a Project having a life of 5 year with following cash flows Project I 30,000 Outflow Inflow T-1 T-2 8,000 9,000 T-3 T-4 T-5 9,000 7,000 5,000 P.V. Table Year 10% 909 20 269 309% 35%6 741 .833 .794 796 2. .826 .694 .630 500 592 751 .683 549 406 301 579 455 482 397 350 .621 402 315 269 223 Calculate IRR of the above project.Year Cash Flow (A) Cash Flow (D) $- -$ 0 348,000 51,000 1234 47,000 24,200 2 67,000 22,200 67,000 19,700 14,800 442,000 Whichever project you choose, if any, you require a return of 14 percent on your investment. a-1.What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Project A Project B Payback period years years a- 2. If you apply the payback criterion, which investment will you choose? O Project A O Project B b- What is the discounted payback period for each project? (Do not round intermediate 1. calculations and round your answers to 2 decimal places, e.g., 32.16.)ces An investment project provides cash inflows of $975 per year for eight years. a. What is the project payback period if the initial cost is $3,500? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. What is the project payback period if the initial cost is $4,550? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. What is the project payback period if the initial cost is $8,800? (Enter O if the project never pays back. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a. Payback period b. Payback period C. Payback period years years years
- Annual cash inflows from two competing investment projects are given below: Investment A $ 4,000 5,000 6,000 7,000 $ 22,000 Year 1234 The discount rate is 10%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: Compute the present value of the cash inflows for each investment. Year 1 2 3 4 $ Investment B $ 7,000 6,000 5,000 4,000 $ 22,000 Present Value of Cash Flows Investment A 0 $ Investment B 0 M ...1/ Smart company invests 10,000 $ in development Project (B) and expect to generate net cash inflows each year as following: Years Project B 10,000 5,000 1 2,500 4,000 1,000 3 4. Calculate the payback period for the project?The following are the cash flows of two projects: Year O1234 0 Project A $ (340) Project B $ (340) 170 240 170 240 170 240 170 What is the payback period of each project? Note: Round your answers to 1 decimal place. > Answer is complete but not entirely correct. Project A Payback Period 2.0 years B 2.8 years
- A company is considering two projects. Project I Project II Initial investment $200,000 $200,000 Cash inflow Year 1 50,000 60,000 Cash inflow Year 2 50,000 60,000 Cash inflow Year 3 50,000 80,000 Cash inflow Year 4 50,000 10,000 Cash inflow Year 5 50,000 50000 What is the payback period for Project II?A firm evaluates all of its projects by applying the IRR rule. Year Cash Flow 0 –$ 150,000 1 66,000 2 73,000 3 57,000 What is the project's IRR? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)A firm evaluates all of its projects by applying the IRR rule. Year 0 1 2 3 Cash Flow -$ 149,000 67,000 72,000 56,000 What is the project's IRR? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)