One of the mutually exclusive alternatives below must be selected Base your recommendation on A(Sauer-Glock) cash flows when the MARR 6% per yearQQQEOYEOYP/5CLi101020PPSauer 45Glock 40.The IRR on A(Sauer-Glock) is%. (Round to two decimal places)20CIB2P

Incremental Analysis: When two mutually exclusive projects have equal lives, incremental analysis…

Answered: One of the mutually exclusive…

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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Please answer show all the steps required to understand the concept clearly with formulas ??
A 07. Subject:- finance
please tell me which is the best option and formulate why, thanks
ed ok O t 1 ht 0 ences For the given cash flows, suppose the firm uses the NPV decision rule. Cash Flow Year 0 123 a. NPV b. NPV -$ 150,000 a. At a required return of 10 percent, what is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. At a required re urn of 20 percent, what is the NPV of the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) 66,000 73,000 57,000
Tom Thompson expects to invest $18,000 at 9% and, at the end of a certain period, receive $92,551. How many years will it be before Thompson receives the payment? (PV of $1. FV of $1. PVA of $1. and EVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.) Future Value $ 92,551 Present Value $ 18,000 = Table Factor Years years
8. By taking n as 30years and using 6% both as MARR and discount rate, compare the below three possible alternatives by using NPV (net present value) and IRR methods, and recommend the best possible alternative. Types of cashflows Alternatives Alternative A Alternative B Initial capital Annual operation and ETB 40,000 Alternative C ETB 5,000,000 ETB 7,000,000 ETB 11,000,00O ЕТВ 150,000 ЕТВ 100,000 maintenance cost Annual benefit ЕТB 560,000 ЕТB 800,000 ЕТВ 1,050,000
Determine the N PV, NAV, modified I RR, and ERR for the following cash flow diagram if the MARR is 10%. 3.8. 2 3 4 -75 50 50 -30 200
PROBLEM 1-Benefit-Cost Analysis Which is the better alternative given 9% discount rate? Alternative A Alternative B 1000 1000 1000 1000 1000 1750 1750 1750 1750 1750 1 2 1 2 3 3,000 4,500 Equation for Incremental Analysis: Better Alternative: -- PROBLEM 2-Determine the External Rate of Return, i' Discount Rate%3D5% Cashflow PV-Cash Outflow PV-Cash Inflow Year (P27,500) 6,000 8,000 7,000 (4,000) 9,000 5,000 6. 1 2 4 3 4 2 1 %3D %3D
Computing Present Value of Single Amount under Different Assumptions Consider the following four separate investment scenarios. Compute the present value under each of the four separate investment options. Note: Round final answer to the nearest whole dollar. Note: Do not use a negative sign (-) with your answers. Future Annual Investment Investment Amount Compounding Interest Rate Period (Years) Investment A $50,000 Annually 5% Semiannually 6% Quarterly 8% Monthly 12% Investment B 250,000 Investment C 300,000 Investment D 400.000 10 10 $ A A Present Value
Investment Opportunity Cash Flows in $ 1 3 1,100 $ (500) $ Suppose you are presented with the investment opportunity described in the table above Assume the applicable annual interest rate is 4.75% Calculate the NPV of this investment. Round your answer to two decimals (Do not include the S-sign in your answer, enter negative values with a minus sign and not in parentheses) Year Benefits Costs 2731.16 0 $ $ 350 $ $ (1,100) $ (1,300) $ 2 500 $ (1,500) $ 4 1,500 $ (400) 5 5,000
None
Find the profitability index for Oman Clothing Company if the initial investment is 700 OMR and the cash Inflows are as follows: Year 1 =350 OMR; Year 2 =400 OMR; Year 3=450 OMR and Year 4=500 OMR. Use discount rate as 10%. Select one: a. 1.15 b. 1.41 c. None of the options d. 1.89 e. 2.89

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One of the mutually exclusive alternatives below must be selected Base your recommendation on A(Sauer-Glock) cash flows when the MARR= 6% per year Q EOY EOY 10 P/5 10 20 2P Glock 40 Sauer 45 The IRR on A(Sauer-Glock) is % (Round to two decimal places) CIC