Information on four investment proposals is given below.Investment requiredPresent value of cash inflowsNet present valueLife of the projectRequired:1 Compute the profitability index for each investment proposal.Note: Round your answers to 2 decimal places.2. Rank the proposals in terms of preferenceInvestment ProfitabilityProposal IndexABCDS (150,000)211,800$61,500RankPreference5 yearsInvestment Proposal$(80,000)110,400$ 30,4007 years$ (160,000)241,600$ 81,6006 yearsD$ (910,000)1.214,500$ 304,5006 years

Profitability index is computed as = Present value of cash inflows / Investment requiredBased on…

Answered: Information on four investment…

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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Compute the IRR statistic for Project F. The appropriate cost of capital is 12 percent. Note: Do not round intermediate calculations and round your final answer to 2 decimal places. Project F Time: 0 Cash flow: -$ 11,000 1 $ 4,100 2 $ 4,930 3 4 $ 2,270 $ 2,900 IRR % Should the project be accepted or rejected? (Click to select) ✓
Based on the parameters calculated, should this project goes ahead? Give your reasons for your answer. Economic Parameters Base case Project IRR Equity IRR NPV($millions)@12% Capital Expenditure($million) PayBack period (Year) WACC (Based on 75/25) 13.68 15.89 9,172,880 (85,000,000) 8.92 0.1246
Note: Where applicable, use the present value tables provided in APPENDICES 1 and 2 that appear after QUESTION 5. REQUIRED Use the information given below to calculate the following: 5.1 Payback Period of both projects (expressed in years, months and days) 5.2 Net Present Value of both projects 5.3 Accounting Rate of Return (on average investment) of Project Ron (expressed to two decimal places) Internal Rate of Return (IRR) of Project Hob. Your answer must include the calculation of two net present values as well as the determination of the IRR expressed to two decimal places. INFORMATION 5.4 Trendy Manufacturers is investigating the possibility of investing in one of two projects. The net cash flows for the two competing investment opportunities are as follows: Year 1 2 3 4 5 Project Ron R560 000 R500 000 R400 000 R200 000 R50 000 Project Hob R340 000 R340 000 R340 000 R340 000 R340 000 Each project requires an initial investment of R1 200 000. A scrap value of R50 000 (not included…
Find the profitability index of a project with the following cash flows using a discount rate of 4%: Period 0: -1000 Period 1: 793 Period 2: 391 Period 3: 204 Round your answer to the nearest one-hundredth.
A project has cash flows of –$148,000, $43,000, $87,000, and $51,500 for Years 0 to 3, respectively. The required rate of return is 11 percent. Based on the internal rate of return of Blank 1 percent for this project, you should Blank 2 the project. Enter your answer in the first blank as a percent rounded to 2 decimal places, e.g., 32.16. Also enter either "accept" or "reject" in the second blank.
The net present value for Proposals X and Y has been calculated on the basis of the data given below. Proposal X Proposal Y Amount to be invested $145,000 $280,000 Total present value of net cash flow 172,000 320,000 Net present value 27,000 40,000 Determine the present value index for each proposal. Round your answers to two decimal places. Present Value Index Proposal X $fill in the blank 1 Proposal Y $fill in the blank 2
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Required: 1a. Compute the net present value for each project. Use a rate of 10% and the present value of an annuity of $1 in the table above. If required, use the minus sign to indicate a negative net present value. If required, round to the nearest whole dollar. Wind Turbines Biofuel Equipment Present value of annual net cash flows $ Less amount to be invested Net present value 1b. Compute a present value index for each project. If required, round your answers to two decimal places. Present Value Index Wind Turbines Biofuel Equipment 2. Determine the internal rate of return for each project by (a) computing a present value factor for an annuity of $1 and (b) using the present value of an annuity of $1 in the table above. If required, round your present value factor answers to three decimal places and internal rate of return to the nearest whole percent. Wind Turbines Biofuel Equipment Present value factor for an annuity of $1 Internal rate of return % %
Compute the payback statistic for Project A if the appropriate cost of capital is 7 percent and the maximum allowable payback period is four years. (Round your answer to 2 decimal places.) Project A Time: 0 1 2 3 4 5 Cash flow: −$1,400 $510 $600 $600 $380 $180 Payback years: _______.__
Please answer entire question! (mc options 19%, 20%, 21%, 22%, 23%)
A small company wants to invest in Project A or B. The cash flows for both are shown below. Determine the payback period for each project assuming a MARR of 5% and suggest which project should be selected based on discounted payback period analysis.
How would i solve number 2 on this problem

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