Moates Corporation has provided the following data concerning an investment project that it is considering:Initial investnentAnnual cash flowExpected life of the projectDiscount rate$380,000$124,000 per year4 years10%Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.The net present value of the project is closest to:Multiple Cholce$12.956$380,000$/256,000)< Prev33 of 36Next >K 69°F Mostly cloudyA EW10re to searchDELL近...

Net present value = Present value of annual cash flows - Initial investment PVA(n=4,i=10%) = 3.170

Answered: Moates Corporation has provided the…

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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Required information The following data is provided for a PPP project. To the Government $1.8 milion naw and $200,000 every 3 years To the People Benefits $90,000 per year beginning now Cost $25,000 per year Savings $115,000 per year Disbenefits Calculate the conventional benefit/cost ratios using an interest rate of 7% per year and an infinite project period. The conventional B/C ratio is
ces Duo Corporation is evaluating a project with the following cash flows: Year 0 Cash Flow -$ 29,100 -2345 1 11,300 14,000 15,900 13,000 -9,500 The company uses a discount rate of 12 percent and a reinvestment rate of 7 percent on all of its projects. a. Calculate the MIRR of the project using the discounting approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the MIRR of the project using the reinvestment approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. Calculate the MIRR of the project using the combination approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Discounting approach MIRR b. Reinvestment approach MIRR % c. Combination approach MIRR %
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Vaughn Company has the following information about a potential capital investment: Initial investment Annual cash inflow Expected life Cost of capital $ 340,000 $ 80,000 7 years 13% 1. Calculate the net present value of this project. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round the final answer to nearest whole dollar.) Net Present Value
Internal rate of return and modified internal rate of return. Quark Industries has three potential projects, all with an initial cost of $1,900,000. Given the discount rate and the future cash flow of each project, what are the IRRs and MIRRs of the three projects for Quark Industries? Cash Flow Project M Project N Project O Year 1 $500,000 $600,000 $1,000,000 Year 2 $500,000 $600,000 $800,000 Year 3 $500,000 $600,000 $600,000 Year 4 $500,000 $600,000 $400,000 Year 5 $500,000 $600,000 $200,000 Discount rate 9% 13% 16% What is the IRR for project M?
Find the net present value (NPV) for a proposed project costing $22,960. Assume that the appropriate cost of capital for projects of this risk level, at this company is 9.58%, and the estimated cash flows for the life of the project are as follows: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 $6,920 $5,329 $6,451 $9,655 $12,368 $4,319
Compare the projects below using future worth analysis at i=16% per year. Apply LCM method, Write formula, use compound interest table for extracting factors, show your calculation step by step, and find final result. Draw cash flow diagram for both projects Project 1 Project 2 First cost Annual operating cost Salvage value Life, years -9000 -8000 -800 -800 700 1000 5 10
Doak Corporation is evaluating a project with the following cash flows: Year 0 1 2 Cash Flow -$ 53,000 16,700 21,900 27,300 20,400 -8,600 The company uses an interest rate of 10 percent on all of its projects. Calculate the MIRR of the project using all three methods. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Discounting approach Reinvestment approach. Combination approach Sover 17.00 % % %
Moates Corporation has provided the following data concerning an investment project that it is considering: Initial investment Annual cash flow $310,000 $137,000 per year Expected life of the project Discount rate 4 years 11% Click here to view Exhibit 120-1 and Exhibit 120-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the project is closest to: Multiple Choice $310,000 $115,111 $(173.000)
Newland Company is considering investing in one of two projects – A or B. The initial cost and net cash inflows from each project are shown below. The discount rate for both projects is 18% per cent. Cash Flow Project A Project B $ $ Initial Cost 3,000,000 3,500,000 Net Cash Inflows Year 1 800,000 1,000,000 Year 2 800,000 1,000,000 Year 3 1,200,000 700,000 Year 4 1,200,000 800,000 Year 5 1,200,000 800,000 Year Factor 1 0.8475 2 0.7182 3 0.6086 4 0.5158 5 0.4371 Discount factors for the projects @18% per annum are as follows: Required: Calculate the Accounting Rate of Return on average capital for each project. Calculate the net present value (NPV) for each project and identify the project in which the company should invest, giving ONE reason for your choice.
Masulis Inc. is considering a project that has the following cash flow and WACC data. What is the project's discounted payback period? WACC: 10.00% Year 0 1 2 3 4 Cash flows -$750 $525 $485 $445 $405 2.44 years 1.68 years 1.80 years 1.99 years 2.22 years

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