Kara, Incorporated, imposes a payback cutoff of three years for its internationalinvestment projects.Cash Flow (B)YearCash Flow (A)0-$ 53,000-$ 63,000123419,50011,500221,00014,50017,50019,0004,500223,000What is the payback period for both projects? (Do not round intermediate calculationsand round your answers to 2 decimal places, e.g., 32.16.)Project AProject ByearsyearsWhich project should the company accept?Project AO Project B

Payback period:Payback period often favored for its simplicity, providing a quick assessment of an…

Answered: Kara, Incorporated, imposes a payback…

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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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.
1. Kara, Incorporated, imposes a payback cutoff of three international investment projects. Year Cash Flow (A)Cash Flow (B) -$ 73,000 0 1 2 3 4 $63,000 24,500 31,000 22,500 9,500 16,500 19,500 29,000 233,000 What is the payback period for both projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) What is the payback period for both projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
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The following information pertains to Yoyo Projects for the three months ended 31 May 2020:ActualBudgetedMarchRAprilRMayRRevenue (20% for cash and 80% on credit)360 000380 000400 000Purchases (10% for cash 90% on credit)240 000280 000320 000Salaries and wages paid40 00060 00060 000Cash expenses24 00028 00032 000Depreciation2 0002 0002 000Additional Information:a) It is expected that debtors will settle their accounts as follows:• 20 % in the month of invoice• 70% in the month after the month of invoice, and• 5% in the second month after the month of invoice• The remaining 5% is usually written off as bad debts.b) Trade creditors are paid in the month after purchase at a discount of 5%.c) 50% of the salaries and wages are weekly wages. Since wages are paid weekly, usually 10% of the wages are paid in the month following the month in which they were incurred.d) Expenses are paid as they arise.e) The favourable bank balance on 1 April 2020 was R 21 000.RequiredPrepare the Cash Budget of…
A business projects get the following flows of cash: Year flows (in Thousands of colones) 1 ¢750.00 two ¢800.00 3 ¢700.00 4 ¢1,000.00 5 ¢975.00 6 ¢1,500.00 7 ¢2,000.00 Yes the rate of discount it is of twenty%, which it is the worth Present of these flows?
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Kara, Incorporated, imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. Year Cash Flow (A) -$ 59,000 Cash Flow (B) 01234 24,000 31,400 26,000 12,000 -$ 104,000 26,000 31,000 28,000 236,000 a. What is the payback period for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b. Which, if either, of the projects should the company accept? a. Project A years Project B years b. Project acceptance Accept Project A and reject Project B
Calculate the Payback Period using the following Information All figures are in OMR Initial Investment = 25000 Cash Flow after Tax(CFAT) are as follows : Year 1 : 5000 Year 2 : 5000 Year 3 : 5000 Year 4 : 4000 Year 5 : 6000 4 Years and 6 months 5 Years 5 Years 2 Years
Assume a $260,000 investment and the following cash flows for two products: Year Product X Product Y 1 23 $ 90,000 80,000 81,000 40,000 $ 80,000 70,000 50,000 80,000 a. Calculate the payback for products X and Y. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Product X Product Y years years
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Kara, Incorporated, imposes a payback cutoff of three years for its international investment projects. Year Cash Flow (A) Cash Flow (B) 01234 -$ 53,000 -$ 63,000 19,500 11,500 21,000 14,500 17,500 19,000 4,500 223,000