Jiminez Company has two Investment opportunitles. Both Investments cost $5,700 and will provide the following net cash flows:YearInvestment AInvestment B$3,350$3,3503,3504,42033,3502,35043,3501,140What Is the total present value of Investment A's cash flows assuming an 9% minimum rate of return? (PV of $1 and PVA of $1) (Use approprlate factor(s) from the tables provlded. Do not round Intermedlate calculetions. Round your answer to the nearest doillar.)Multiple Choice$11,830.$5.153.$9.416.$3.350.PreyNest >$51 AM

Present Value is the current value of a sum of money after a specified time span provided a fixed…

Answered: Juminez Company has two Investment…

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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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.
Cash flows for two mutually exclusive projects are shown below: Year CFM CFN 0 -200 -200 1 85 60 2 85 85 3 85 110 Both projects have a cost of capital of 10%. c(ii). Calculate the NPV for CFn project
A company is considering two mutually exclusive investments with a discount rate of 10%.The cash flows of the projects over time follows: Time Project A Project B 0 - RM300,000 - RM405,000 1 - RM387,000 RM134,000 2 - RM193,000 RM134,000 3 - RM100,000 RM134,000 4 RM600,000 RM134,000 5 RM600,000 RM134,000 6 RM850,000 RM134,000 7 - RM180,000 RM0 Question: The company does not want to issue new share capital or debentures to financethis project. Recommend three (3) appropriate financing methods for this project.Provide support for your recommendations.
A company has a 11% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: What is each project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. Project A: $ fill in the blank 2 Project B: $ fill in the blank 3 What is each project's IRR? Round your answer to two decimal places. Project A: fill in the blank 4% Project B: fill in the blank 5% What is each project's MIRR? (Hint: Consider Period 7 as the end of Project B's life.) Round your answer to two decimal places. Do not round your intermediate calculations. Project A: fill in the blank 6% Project B: fill in the blank 7% From your answers to parts a-c, which project would be selected? If the WACC was 18%, which project would be selected? Construct NPV profiles for Projects A and B. Round your answers to the nearest cent. Do not round your intermediate calculations. Negative value should be indicated by a minus…
A company is considering two mutually exclusive investments with a discount rate of 10%.The cash flows of the projects over time follows: Time Project A Project B 0 - RM300,000 - RM405,000 1 - RM387,000 RM134,000 2 - RM193,000 RM134,000 3 - RM100,000 RM134,000 4 RM600,000 RM134,000 5 RM600,000 RM134,000 6 RM850,000 RM134,000 7 - RM180,000 RM0 A. What is the Net Present Value (NPV) for each project? B. Since the projects are mutually exclusive, which project would you recommend?Justify your recommendation. C. Suppose that the projects are independent projects, which project (s) would yourecommend? Justify your recommendation.
A $169,700 initial investment will generate the following present values of net cash flows. What is the break-even time for this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) Note: Round "Break-even time" answer to 1 decimal place. Year Initial investment 1. 2. 3. 4. 5. Break-even time Present Value of Net Cash Flows. $ (169,700) 51,818 47,105 37,888 38,931 35,391 Cumulative Present Value of Net Cash Flows $ (169,700) (117,882) (70,777) (32,889) years 6,042 41,433
A project has an initial capital outlay of Kshs.150,000 and unequal net cash-flows of Kshs 100,0000 in year one, Kshs 80,000 in year two, Kshs 70,000 in year three, Kshs 60,000 in year four, Kshs 50,000 in year five and a Kshs. 30,000 residual values at the end of its life in year six. REQUIRED i. Calculate the Accounting Rate of Return ii. Calculate the Internal Rate of Return iii. From your studies, what is the importance of Internal Rate of Return?
Cash flows for two mutually exclusive projects are shown below: Year CFM CFN 0 -200 -200 1 85 60 2 85 85 3 85 110 Both projects have a cost of capital of 10%. e(ii). Calculate the MIRR for CFn project.
M/s Sons & Sons is considering two projects, A & B, with cash flows as shown below: period Cash Flow of Project A Project B 0 -90,000 -150,000 1 30,000 72,000 2 30,000 35,000 3 30,000 40,000 4 30,000 25,000 Calculate discounted payback period, net present value and internal rate of return for each project using opportunity cost of capital 13 % & 9% for project A & B respectively. Which project(s) should be accepted if : (i) The projects are mutually exclusive and there is no capital constraint. (ii) The projects are independent and there is no capital constraint. (iii) The projects are independent and there is a total of $100,000 of financing for capital outlays in the coming period. Why the cost of capital for A might be higher than for B. State possible reason(s) (show the calculations & formula on word/excel)
A company is considering two mutually exclusive investments with a discount rate of 10%.The cash flows of the projects over time follows: Time Project A Project B 0 - RM300,000 - RM405,000 1 - RM387,000 RM134,000 2 - RM193,000 RM134,000 3 - RM100,000 RM134,000 4 RM600,000 RM134,000 5 RM600,000 RM134,000 6 RM850,000 RM134,000 7 - RM180,000 RM0 Net Present value given : Time Project A Project B Project A Project B 0 -300,000 -405,000 1.0000 (300,000.00) (405,000.00) 1 -387,000 134,000 0.9091 (351,818.18) 121,818.18 2 -193,000 134,000 0.8264 (159,504.13) 110,743.80 3 -100,000 134,000 0.7513 (75,131.48) 100,676.18 4 600,000 134,000 0.6830 409,808.07 91,523.80 5 600,000 134,000 0.6209 372,552.79 83,203.46 6 850,000 134,000 0.5645 479,802.84 75,639.51 7 -180,000 0 0.5132…
Please show calcualtons, (Excel or long hand): 13) Develop a cash flow worksheet based on the following information, initial investment = 500,000, 5-year property, variable costs = 54%, fixed costs 70,000 per year, sales yr 1 = 300,000 yr 2 = 500,000, yr 3 = 750,000, yr 4 = 550,000, yr 5 = 250,000 tax rate = 21%
Please give answer a & b And Don't give answer in image format

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