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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Hello Mitty Ltd is considering a project MEA as shown below. The estimated cash flows for this project is as follows: Project MEA £000 Investment (immediate cash outflow) 70 Net annual cash inflows: Year 1 40 Year 2 45 The business’s cost of finance is estimate at 12 per cent. Calculate: a) The net present value for project MEA. b) The approximate internal rate of return for project MEA.
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?
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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.
Ajeet Construction Ltd is planning to take a project which initial cash outflow is 100000.The expected cash inflows from this are tk 40000, tk25,000, tk 20000,tk 35,000, & tk.35000. Calculate the NPV & IRR of this project, when rate of cost of capital is 15%.
Apple is considering two mutually exclusive projects. The required rate of return on this project is 10%. The two projects provide the following information: Project A Project B Initial Outlay (RM500,000) (RM500,000) Inflow year 1 RM120,000 RM160,000 Inflow year 2 RM110,000 RM160,000 Inflow year 3 RM130,000 RM160,000 Inflow year 4 RM180,000 RM160,000 d. Calculate the internal rate of return (IRR) for project B, Given the IRR for project A is 6% e. Based on your answer in (a) to (d), which project should be accepted? Explain your decision.
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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
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