Illustration: An investment opportunity costs $10,000 and returns $5,000, $4,000, and $3,000, respectively, the first three years. What is the internal rate of return (IRR)?
Q: A firm has an opportunity to invest $100,000 in a project that will result revenue of $30,000 per…
A: Given: Initial investment is -$100,000 Revenue = $30,000 Maintenance = $8,000 Salvage value =…
Q: The table bellow shows the cash flow for an engineering project, if the reinvestment rate of return…
A: ERR is a technique used for investment appraisal.
Q: Use the following data to answer questions (a) to (d). A company is considering the purchase of a…
A: To open the "NPV function" window - MS-Excel --> Formulas --> Financials --> NPV.
Q: You are considering an investment that will cost $15,000 and generate returns of $4,000 at the end…
A: Whenever an individual or a corporation has to evaluate the investment based upon the feasibility of…
Q: You are considering an investment that will cost $15,000 and generate returns of $4,000 at the end…
A: NPV is the sum of present value of future cashflows less initial investment
Q: Your company is considering a capital project that will require a net initial investment of…
A: Solution:- Internal Rate of Return (IRR) means the rate of return the project is yielding. At IRR,…
Q: A $15,000 investment is to be made with anticipated annual returns as shown in the spreadsheet in…
A: The Present value of an investment is the present worth of a future cash flows to be received at a…
Q: A 2-year investment of $2,000 results in a cash flow of $150 at the end of the first year and…
A: Computation of IRR:
Q: An equipment with a cost of P 100 000 is expected to generate returns of P 90 000; P 60 000 and P 50…
A: Discount rate = 12% Equipment cost = P100,000 Return in year 1 = P90,000 Return in year 2 = P60,000…
Q: Suppose a project with a 6% discount rate yields R5000 for the next three years. Annual operating…
A: NPV is the first priority rule.
Q: Question: A project pays $2000 today, costs $5000 a year from now, and pays $12, 500 in two years.…
A: Here, Cash inflow in year 0 is $2,000 Cash Outflow in Year 1 is $5,000 Cash Inflow in Year 2 is…
Q: If an investment project costs a firm £200 and yields a stream of profits of £100 per year for the…
A: Internal rate of return(IRR) is one of the techniques of capital budgeting that take into…
Q: You are looking at an investment which has an initial cost of $400,000 and a salvage value of zero…
A: Average accounting return is calculated by dividing average net income by average investment.…
Q: Determine the ROR, AW, and PP of the following engineering project when the MARR is 20% per year. Is…
A: Capital budgeting is a process of determining the profitability of different capital projects. With…
Q: Find internal rate of return of a project with an initial cost of $43,000, expected net cash inflows…
A: Excel Spreadsheet:
Q: You are faced with a decision on an investment proposal. Specifically, the estimated additional…
A: Capital Budgeting and capital budgeting techniques: The process of evaluating several prospective…
Q: Assume that it costs $1000 to start a project. If the project will give $400 profit in the first…
A: Using Excel functions for calulations
Q: For a project that has a net investment of $1,500,000 and net cash flows of $400,000 for 5 years; Is…
A: Internal rate of return is the rate of return earned on an investment. It is the rate of return at…
Q: f you insulate your office for $29,000, you will save $2,900 a year in heating expenses. These…
A: a. Given, Saving Amount per Year = $2,900 Investment Amount = $29,000 NPV at Cost of Capital of…
Q: Find internal rate of return of a project with an initial cost of $43,000, expected net cash inflows…
A: Working of the IRR of the Project is shown below: Hence, the IRR is 14.90%.
Q: Colin is analyzing a 3-year project that has an initial cost of $199,800. This cost will be…
A: Average accounting rate of return is calculated with the formula belowARR = Average Net…
Q: What is the internal rate of return (IRR) of a project that costs $20,070 if it is expected to…
A: Internal rate of return is the return at which the present value of the project is zero. In other…
Q: An initial investment of £80,000 has an interim return of £30,000 in year 5 and a final return of…
A: The IRR is the discount rate where the cash outflows are equal to the cash inflows and the net…
Q: A project whose machinery and installation cost $15,000, promises a net stream of savings of…
A: Given that;The cash flows are:Year 0: -$15,000Year 1: $3,000Year 2: $3,000Year 3: $3,000Year 4:…
Q: Suppose you are considering a project that will have an initial construction cost today and a final…
A: profitability index is present value of cash flow divided by initial investment.
Q: The capital investment in the system is $72,000, and the projected annual savings are tabled below.…
A: Future Worth: Using an expected rate of growth, future value (FV) is defined as the worth of a…
Q: Alternative Uno has a first cost of $10,000 and annual expenses of $3000, whereas Alternative Dos…
A: Incremental analysis is a tool to evaluating best alternative among given options. To know the…
Q: You are faced with a decision on an investment proposal. Specifically, the estimated additional…
A: MARR: It is the minimum expected rate of return and evaluated by comparing it with IRR (Internal…
Q: You are looking to invest in a project. The expected return of 5% is used as the discount rate. The…
A: Discount Rate = 5℅ Initial Investment = P6,000,000
Q: Find internal rate of return of a project with an initial cost of $43,000, expected net cash inflows…
A: We can find the internal rate of return for a stream of constant cash flows using RATE function of…
Q: Consider an investment that costs 100,000 and has a cash inflow of 30,000 every year for 5 years.…
A: Given Information, Initial Cost =100,000 Cash Inflow = 30,000 Annually Time Period =5 years…
Q: Alternative G has a first cost of $250,000 and annual costs of $73,000. Alternative H has a first…
A: The present value is the value of the sum received at time 0. It is the current value of the sum…
Q: Suppose a Project which required Initial Investment of $ 40,000 and will pay you $10,000, $12,000,…
A: The question is related to Capital Budgeting. As per the question we will calculate the pay back…
Q: Find internal rate of return of a project with an initial cost of $43,000, expected net cash inflows…
A: Capital budgeting approaches are the techniques that the management of the company adopts to…
Q: An investment under consideration has a payback of seven years and a cost of $685,000. Assume the…
A: In this we have to calculate annual cash flow and than calculate the net present value.
Q: investment opportunity costing 120,000 is expected to yield net cash flows of 40,000 annually for…
A: Solution a: Computation of NPV Particulars Period Amount PV factor at 12% Present Value Cash…
Q: An investment project involves an investment now of 100. In one year, a positive cash flow of 40 is…
A: Capital budgeting is the process by which a corporation examines potential large projects or…
Q: If you insulate your office for $18,000, you will save $1,800 a year in heating expenses. These…
A: Formula: NPV = Present values of cash inflows - Present values of cash outflows. Deduction of…
Q: For a project that has a net investment of $150,000 and net cash flows of $40,000 for 5 years; Is…
A: Given information: Project’s net investment is $150,000 Net cash flows of $40,000 for 5 years
Q: An investment under consideration has a payback of seven years and a cost of €724,000. Assume the…
A: given information payback period = 7 years cost = €724,000. required rate of return = 12%
Q: A project has a NPV of 15,000 when the cutoff rate is 10%. The annual cash flows are 20,505 on an…
A: Profitability index is used to see the attractiveness of investment or a project. It is also written…
Q: You are considering an investment product that is expected to generate an annual cash flow of $2,000…
A: Annual cashflow (A) = $2000 starting after 3 years Cost of investment in year 0 (C0) = $10000 C1 =…
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- Compute the Payback Period, Discounted Payback Period, Net Present Value, Internal Rate of Return, and Productivity Index of all four alternatives based on cash flow. use 10 percent for the cost of capital in the calculations. For the Payback Period and for the Discounted Payback Period, compute to the midyear points. ALL Information is in the PNGs!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!You invest $5000 at time t=0 and an additional $2000 at time t=1/2. At time t=1/2 you have $5300 in your account and at time t=1 you have $7300 in your account. Find the dollar-weighted rate of return rd and the time-weighted rate of return rt on this investment.A. rd= 2.86 %, rt=3.43 %B. rd= 2 %, rt=2.4 %C. rd= 6.26 %, rt=7.5 %D. rd= 2.51 %, rt=3 %E. rd= 5.01 %, rt= 6 % Please answer it only correct without using ExcelCan I please have the answers in these format : payback period = investement net annual inflow ARR = Average annual profit x 100 Average investment 1 can I have the answers in these type of format
- ou invest $1000at time t=0 and an additional $5000 at time t=1/2. At time t=1/2 you have $1300 in your account and at time t=1 you have $6100 in your account. Find the dollar-weighted rate of return rd and the time-weighted rate of return rt on this investment.What is the internal rate of return of an investment that requires a 10 percent minimum rate of return and has the following projected cash flows: Yr0 = -100, Yr1 = 25, Yr2 = 35, Yr3 = 45, Yr4 = 35, and Yr5 = 30? a. 19.33 percent b. 21.35 percent c. 20.05 percent d. 22.24 percentDetermine the ending value of the investment. Rate of return = 10%
- Calculate the rate of return (ROR) using the formula: ROR = (Net annual profit/investment)*100 With rate of interest = 10%Approximately, what is the value of PG (present worth of arithmetic gradient) if G=170, n=4 years, and i= 4.5% per year?CONSIDERING THAT: You want to make an initial investment of $100,000, and maintain a constant weighting of 40% for asset 1 and 60% for asset 2. CALCULATE: What would be the average rate of return on asset 1? What would be the average rate of return on asset 2? What would be the average rate of return of the portafolio?
- Suppose that we make contributions to a fund of $125 today and $750 in twoyears for a return of $1000 in one year. First write the Net Present Value as a function of the discount factor ν. Secondly, use the NPV to calculate the yield rate of this investment (select the larger value for i. Finally, explain whether or not this is a good investment for us. Please show all workWhen calculating the annual rate of return, the average investment is equal to initial investment divided by life of project. (initial investment plus $0) divided by 2. (initial investment plus salvage value) divided by 2. initial investment divided by 2.a)Calculate the internal rate of retum (IRR) of the following cash flow. Determine if this is a good investment for a MARR of 3% per year. b)Calculatethe extemalrate of return (ERR) of the following cash flow by assuming a MARR of 3% per year. Determine if this is a good investment. Cash Flow, $ -100,000 -10,000 -1,000 13,000 13,000 13,000 Cash Flow, $ |16,000 |16,000 16,000 16,000 16,000 16,000 Year 6 Year 1 2 3 4 5 10 11