Net Present Value (NPV)In this assignment, you are required to prepare aPowerPoint presentation reviewing 3 projects. Youwill calculate the NPV, IRR, and payback period foreach project. Utilizing the capital budgetingcalculations, you will need to select the bestinvestment for the company. These calculations willbe based on the following scenario:AIU Industries has 3 potential projects to consider,all with an initial cost of $1,250,000. The companyprefers to reject any project with a 4-year cut-offperiod for recapturing initial cash outflow. Given thecost of capital rates and the future cash flow foreach project, determine which project the companyshould accept.Project AProject Project UCash FlowYear 1250,000 450,000 250,000Year 2250,000 450,000 400,000Year 3250,000450,000 600,000Year 4250,000450,000 800,000Year 5400,000400,000 200,000Year 6400,000400,000 800,000Year 7400,000 400,000 600,000Year 8400,000400,000 200,000Cost of Capital4%6%8%

Slide 1: Title SlideTitle: Capital Budgeting Analysis for AIU IndustriesSubtitle: Evaluating Project…

Answered: Net Present Value (NPV) In this…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 3PB: Net present value method, present value index, and analysis for a service company First United Bank...

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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 has initial costs of $1,000 and subsequent cash inflows of $700, 200, 200 and 200. The company's 10% cost of capital is an appropriate discount rate for this average risk project. Calculate the following: 1. Payback Period 2. NPV 3. Profitability Index 4. IRR 5. MIRR Please number/label each of your answers as shown above. Be sure to show your TVM function calculator inputs, and four decimal places.
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Use the format in the figure below to perform a financial analysis. Create a spreadsheet to perform the analysis and show the NPV, ROI, and year in which payback occurs. + Perform a financial analysis for a project using the format provided in Figure 4-5. Assume that the projected costs and benefits for this project are spread over four years as fol- lows: Estimated costs are $200,000 in Year 1 and $30,000 each year in Years 2, 3, and 4. Estimated benefits are $0 in Year 1 and $100,000 each year in Years 2, 3, and 4. Use a 9 percent discount rate, and round the discount factors to two decimal places. Create a spreadsheet or use the business case financials template on the companion website to cal- culate and clearly display the NPV, ROI, and year in which payback occurs. In addition, write a paragraph explaining whether you would recommend investing in this project, based on your financial analysis. Discount rate 8% Assume the project is completed in Year 0 0 Costs Discount factor…
A project has initial costs of $3,000 and subsequent cash inflows of $1350,275,875 and 1525 . The company's 10% cost of capital is an appropriate discount rate for this average risk project. Calculate the following: NPV IRR Profitability Index Please number/label each of your answers as shown above. Be sure to show your TVM function calculator inputs, and four decimal places.
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☐ Group Case Study: Capital Budgeting Wise Age Care Home LLC is considering allocating a limited amount of capital investment funds among four proposals (independent living facility, assisted living facility, memory care facility, and retirement community facility). The amount of proposed investment, estimated income from operations, and net cash flow for each proposal are as follows: Proposal Investment Year Income from Total Cash Flows Operations from Assets (OCF) (CFFA) Proposal A living (Independent $540,000 42,000 150,000 facility) 1 $ 2 42,000 150,000 3 ISI 42,000 $ 150,000 4 $ (18,000) $ 90,000 5 $ (18,000) $ 90,000 $ 90,000 630,000 Proposal B (Assisted $250,000 50,000 100,000 living facility) 1 2 [$ 40,000 90,000 3 [$ 30,000 80,000 4 |$| 15,000 $ 65,000 5 $ 15,000 $ 65,000 150,000 400,000 Proposal C (Memory $640,000 92,000 220,000 Care facility) 1 $ 2 $ 82,000 210,000 3 82,000 210,000 14 $ 62,000 190,000 5 $ 32,000 $ 160,000 350,000 990,000 Proposal D (Retirement $310,000…
There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,000 and is expected to generate the following cash flows: Use the information from the previous exercise to calculate the internal rate of return on both projects and make a recommendation on which one to accept. For further instructions on internal rate of return in Excel, see Appendix C.
There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment or $28.000 and is expected to generate the following cash flows: If the discount rate is 5% compute the NPV of each project and make a recommendation of the project to be chosen.
Net present value method, present value index, and analysis for a service company First United Bank Inc. is evaluating three capital investment projects by using the net present value method. Relevant data related to the projects are summarized as follows: Instructions 1. Assuming that the desired rate of return is 15%, prepare a net present value analysis for each project. Use the present value table appearing in Exhibit 2 of this chapter. 2. Determine a present value index for each project. (Round to two decimal places.) 3. Which project offers the largest amount of present value per dollar of investment? Explain.
Joliet Company is considering two alternative investments. The company requires an 18% return from its investments. Compute the IRR for both Projects and recommend one of them. For further instructions on internal rate of return in Excel, see Appendix C.

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