Lew Iss See Kay LLP (LISKL) is currently evaluating an investment in a new comedy club. The club is expected to last for 4 years and generate a CF1 = $11,000, CF2 = $9,680, CF3 = $10,648, and CF4 = $45,454. The initial outlay is $20,000. Suppose a company has proposed a new 4-year project. The project has an initial outlay of $66,000 and has expected cash flows of $19,000 in year 1, $23,000 in year 2, $28,000 in year 3, and $34,000 in year 4. The required rate of return is 12% for projects at this company. What is the discounted payback for this project?
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- Jasmine Manufacturing is considering a project that will require an initial investment of $52,000 and is expected to generate future cash flows of $10,000 for years 1 through 3, $8,000 for years 4 and 5, and $2,000 for years 6 through 10. What is the payback period for this project?Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated revenue producing life of 4 years. Falkland has a cost of capital of 8%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?Redbird Company is considering a project with an initial investment of $265,000 in new equipment that will yield annual net cash flows of $45,800 each year over its seven-year life. The companys minimum required rate of return is 8%. What is the internal rate of return? Should Redbird accept the project based on IRR?
- pleaser provide correct answer without fail !!!!Management of Sunland Home Furnishings is considering acquiring a new machine that can create customized window treatments. The equipment will cost $266,550 and will generate cash flows of $81,750 over each of the next six years. If the cost of capital is 15 percent, what is the MIRR on this project? - MMR = ? %Vencap Enterprises is evaluating an investment opportunity that will require contributions of $30,900 in Year 1 and $10,900 in Year 2. Returns of $29,000, $64,500, and $44,500 are expected in the three following years. a. What price should Vencap offer for the investment opportunity if it requires a 9.9% return on investment? (Do not round intermediate calculations and round your final answer to the nearest whole dollar amount.) Price %24
- The Ball Shoe Company is considering an investment project that requires an initial investment of $532,000 and returns cash inflows of $79,275 per year for 10 years. The firm has a maximum acceptable payback period of 8 years. a. Determine the payback period for this project. b. Should the company accept the project?← FastTrack Bikes, Inc. is thinking of developing a new composite road bike. Development will take six years and the cost is $214,500 per year. Once in production, the bike is expected to make $296,481 per year for 10 years. The cash inflows begin at the end of year 7. For parts a-c, assume the cost of capital is 9.5%. a. Calculate the NPV of this investment opportunity. Should the company make the investment? b. Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. c. How long must development last to change the decision? For parts d-f, assume the cost of capital is 14.2%. d. Calculate the NPV of this investment opportunity. Should the company make the investment? e. How much must this cost of capital estimate deviate to change the decision? f. How long must development last to change the decision? a. Calculate the NPV of this investment opportunity. If the cost of capital is 9.5%, the NPV is $.…Assume you are the finance manager of Almanor Company, and the company is considering investing in one of the three projects. The life for both the Projects X, M and Project Y is 5 years. Project X costs OMR. 20500, Project M costs OMR. 20500 and Project Y costs OMR.20500. The discount rate/cost of capital is 4.15%. Required: Use the following techniques to help company to decide which Machine is better and justify why? a) Payback period b) Discount payback period c) Net Present Value d) Present value index -Profitability index. Year Project X Project M Project Y 7865 3748 8752 4567 7609 8393 3. 9676 4628 4508 7292 8905 7836 9904 0066 8287 (Ctrl) - 45
- FastTrack Bikes, Inc. is thinking of developing a new composite road bike. Development will take six years and the cost is $199,500 per year. Once in production, the bike is expected to make $303,531 per year for 10 years. The cash inflows begin at the end of year 7. For parts a-c, assume the cost of capital is 10.5%. a. Calculate the NPV of this investment opportunity. Should the company make the investment? b. Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. c. How long must development last to change the decision? For parts d-f, assume the cost of capital is 13.3%. d. Calculate the NPV of this investment opportunity. Should the company make the investment? e. How much must this cost of capital estimate deviate to change the decision? f. How long must development last to change the decision?FastTrack Bikes, Inc. is thinking of developing a new composite road bike. Development will take six years and the cost is $207,800 per year. Once in production, the bike is expected to make $292,039 per year for 10 years. The cash inflows begin at the end of year 7. For parts a-c, assume the cost of capital is 9.6%. a. Calculate the NPV of this investment opportunity. Should the company make the Investment? b. Calculate the IRR and use it to determine the maximum devlation alowable in the cost of capital estimate to leave the decision unchanged. c. How long must development last to change the decision? For parts d-f, assume the cost of capital is 13.1%. d. Calculate the NPV of this investment opportunity, Should the company make the investment? e. How much must this cost of capital estimate deviate to change the decision? f. How long must development last to change the decision?FastTrack Bikes, Inc. is thinking of developing a new composite road bike. Development will take six years and the cost is $207,800 per year. Once in production, the bike is expected to make $292,039 per year for 10 years. The cash inflows begin at the end of year 7. For parts a-c, assume the cost of capital is 9.6%. a. Calculate the NPV of this investment opportunity. Should the company make the Investment? b. Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. c. How long must development last to change the decision? For parts d-f, assume the cost of capital is 13.1%. d. Calculate the NPV of this investment opportunity. Should the company make the investment? e. How much must this cost of capital estimate deviate to change the decision? f. How long must development last to change the decision?