Nationgate Corporation is considering two projects of machinery that perform the same task. The required rate of return for these projects is RM10%. The projects' expected cas flows are as follows: Year 0 1 2 3 4 Machine MIR (RM) (27,000) 13,000 14,000 17,000 13,000 a) Payback Period b) Discounted Payback Period c) Accounting Rate of Return d) Internal Rate of Return Machine ZA (RM) (27,000) 6,000 15,000 19,000 19,500 Based on the above information, you are required to make an analysis for the decision c Capital Budgeting based on the following techniques:

Nationgate Corporation is considering two projects of machinery that perform the same task. The required rate of return for these projects is RM10%. The projects' expected cas flows are as follows: Year 0 1 2 3 4 Machine MIR (RM) (27,000) 13,000 14,000 17,000 13,000 a) Payback Period b) Discounted Payback Period c) Accounting Rate of Return d) Internal Rate of Return Machine ZA (RM) (27,000) 6,000 15,000 19,000 19,500 Based on the above information, you are required to make an analysis for the decision c Capital Budgeting based on the following techniques:

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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Similar questions

You are responsible to manage an IS project with a 4-year horizon. The annal cost of the project is estimated at $40,000 per year, and a one-time costs of $120,000. The annual monetary benefit of the project is estimated at $96,000 per year with a discount rate of 6 percent. a. Calculate the overall return on investment (ROI) of the project. b. Perform a break-even analysis (BEA). At what year does break-even occur?
Assuming monetary benefits of a construction project at $50,000 per year, one-time costs (initial investment) of $15,000, recurring costs of $35,000 per year, a discount rate of 10 per cent, and a 4-year time horizon, calculate the net present value (NPV) of an information system's costs and benefits. Calculate the overall return on investment (ROI) of the project. During which year does break-even occur? Use the NPV template provided (modify to suit your answer) and clearly display the NPV, ROI, and year in which payback occurs. Write a paragraph explaining whether you would recommend investing in this project based on your ﬁnancial analysis. Explain your answer referring to the NPV, ROI and payback for this project. Discount Rate (10%) Year 0 - 1.0000 Year 1 - .9091 Year 2 - .8264 Year 3 - .7513 Year 4 - .6830
How do you do this?
1. Assuming monetary benefits of a construction project at $50,000 per year during year 1, 2, 3 and 5 (not year 4), one-time costs (initial investment) of $15,000, recurring costs of $35,000 per year (every year), a discount rate of 10 per cent, and a 5-year time horizon, calculate the net present value (NPV) of an information system's costs and benefits. Calculate the overall return on investment (ROI) of the project. During which year does break-even occur?. Use the NPV template provided (modify to suit your answer) and clearly display the NPV, ROI, and year in which payback occurs. Write a paragraph explaining whether you would recommend investing in this project based on your ﬁnancial analysis. Explain your answer referring to the NPV, ROI and payback for this project. Discount Rate (10%) Year 0 - 1.0000 Year 1 - .9091 Year 2 - .8264 Year 3 - .7513 Year 4 - .6830 Year 5 - .6209
There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,192 and is expected to generate the following cash flows: First Year Second Year Third Year Total Alpha Project $32,000 $22,000 $5,000 $59,000 Beta Project 7,000 23,000 29,047 59,047 A. Calculate the internal rate of return on both projects. Use the IRR spreadsheet function to calculate internal rate of return. Alpha Project % Beta Project % B. Make a recommendation on which one to accept.
based on information on the image attached, Calculate the initial investment required for the project and then Discuss the significance of each ratio in evaluating the project.
A project requires a $41,000 initial investment and is expected to generate end-of-period annual cash inflows of $18,500 for each of three years. Assuming a discount rate of 13%, what is the net present value of this investment? Selected present value factors for a single sum are shown in the table below: - 138 í = 138 n=2 1-13% n=3 n 1 0.8850 0.7831 0.6931
Target Corporation (TGT) is considering a new delivery system that costs $194,875. Assume a required rate of return of 4.26% and the following cash flow schedule: Year 1: $46,608 .Year 2: $70,559 Year 3: $95,705 Year 4: $11,450 The project's discounted payback period (DPP) is closest to O A. 2.08 years. OB. 2.19 years. OC. 2.31 years. COD. 2.44 years.
Consider the following projects, X and Y where the firm can only choose one. Project X costs $1500 and has cash flows of $678, $652, $347, $111, $54, $16 in each of the next 6 years. Project Y also costs $1500, and generates cash flows of $738, $693, $405 for the next 3 years, respectively. WACC=11%.A) Draw the timelines for both projects: X and Y.
A project that costs $50 million is expected to generate $20 million per year over the next 4 years. The project's cost of capital is 6%. a) Find the payback period (PP).b) Find the net present value (NPV).c) Find the internal rate of return (IRR).d) Find the modified internal rate of return (MIRR).
There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $34,665 and is expected to generate the following cash flows: First Year Second Year Third Year Total Alpha Project $31,500 $22,000 $4,500 $58,000 Beta Project 7,500 23,500 29,066 60,066 A. Calculate the internal rate of return on both projects. Use the IRR spreadsheet function to calculate internal rate of return. Alpha Project fill in the blank % Beta Project fill in the blank %
A project requires an initial investment of $60 million and will then generate the same cash flow every year for 9 years. The project has an internal rate of return of 17% and a cost of capital of 10%. A. Compute the project's NPV (in $ million)? Round one deciamal place.

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