Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Life of Internal Net the Rate Project (years) 8 Investment Present of Return Required $860,000 $750,000 $710,000 $910,000 Project Value $420,400 $244,420 $367,670 $231,200 (percent) 22% 16% 23% 21% В 13 8 4 The net present values above have been computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the project profitability index for each project. (Round your answers to 2 decimal places.) Project Profitability Index A B C 2. In order of preference, rank the four projects in terms of net present value, project profitability index and internal rate of return. Project Profitability Index Net Present Internal Rate Value of Return First preference Second preference Third preference Fourth preference ABCD

Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Life of Internal Net the Rate Project (years) 8 Investment Present of Return Required $860,000 $750,000 $710,000 $910,000 Project Value $420,400 $244,420 $367,670 $231,200 (percent) 22% 16% 23% 21% В 13 8 4 The net present values above have been computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the project profitability index for each project. (Round your answers to 2 decimal places.) Project Profitability Index A B C 2. In order of preference, rank the four projects in terms of net present value, project profitability index and internal rate of return. Project Profitability Index Net Present Internal Rate Value of Return First preference Second preference Third preference Fourth preference ABCD

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Oxford Company has limited funds available for investment and must ration the funds among five competing projects. Selected information on the five projects follows: Project InvestmentRequired NetPresentValue Life of theProject(years) A $ 480,000 $ 132,969 7 B 405,000 126,000 12 C 300,000 105,105 7 D 525,000 114,408 3 E 450,000 (26,088 ) 6 The net present values above have been computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, which to accept second, and so on. Required: 1. Compute the profitability index for each project. (Round your answers to 2 decimal places.) 2. In order of preference, rank the five projects in terms of (a) net present value, (b) profitability index.
Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Life of the Present Project Net Internal Investment Rate Value $576,770 $755,000 ș308,594 $720,000 $442,949 $920,000 $145,122 Project Required (years) of Return 9 A $870,000 25% в 14 178 9 248 D 168 The net present values above have been computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the project profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, project profitability index and internal rate of return. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the project profitability index for each project. (Round your answers to 2 decimal places.) Project Profitability Project Index A В D
Vishnu
Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Present Value of Life of the Project A Investment Required Cash Inflows Project Internal Rate (years) of Return $ 160,000 $ 259,323 7 16% B $ 135,000 $ 232,000 12 18% $ 100,000 $ 190,035 7 D $ 164,000 $ 268,136 3 22% 17% The net present values should be computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return. Complete this question by entering your answers in the tabs below. Required 1 Required 2 In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return. Net Present Value Profitability…
Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Project InvestmentRequired PresentValue of Cash Inflows Life oftheProject(years) InternalRateof Return A $ 160,000 $ 259,323 7 16 % B $ 135,000 $ 232,000 12 18 % C $ 100,000 $ 190,035 7 22 % D $ 164,000 $ 268,136 3 17 % The net present values should be computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return.
Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Present Value of Investment Project Required Cash Inflows A $ 180,000 $ 269,323 B $ 130,000 $ 242,000 C $ 100,000 $ 200,035 D $ 160,000 $ 278,136 Life of the Project (years) 7 12 7 3 Internal Rate of Return 15% 20% 19% 18% The net present values should be computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the profitability index for each project. A 2. In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return.
Subject: acounting
Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Project Investment Required Present value of Cash Inflows Life of the Project (years) Internal Rate of Return A $ 190,000 $ 244,323 7 17% B $ 131,000 $ 217,000 12 16% CS 100,000 $ 175,035 7 20% D $ 166,000 $ 253,136 3 21% The net present values should be computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return.
Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Investment Present Value of Cash Life of the Project Internal Rate Project Required A $ 200,000 Inflows $294,323 (years) of Return 7 16% B $ 137,000 $ 267,000 с $ 104,000 $225,035 D $ 167,000 $ 303,136 12 7 3 21% 20% 19% The net present values should be computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the profitability index for each project. Note: Round your answers to 2 decimal places. Project Profitability Index A B C D In order of preference,…
Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Investment Project Required A $ 140,000 B $ 122,000 C D $ 100,000 $ 174,000 Present Value of Cash Inflows $ 304,323 $ 277,000 $235,035 $313,136 Required 1 Required 2 Life of the Project (years) 7 12 7 3 The net present values should be computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Project A B C Internal. Rate Required: 1. Compute the profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return. of Return 14% Complete this question by entering your answers in the tabs below. 19% 18% 178 Profitability Index Compute the profitability index for each project. (Round your answers to 2 decimal places.)
Garage, Inc., has identified the following two mutually exclusive projects: Year -$ 29,100 14,500 12,400 9,250 5,150 Cash Flow (A) Cash Flow (B) -$ 29,100 4,350 9,850 15,300 16,900 a-1 What is the IRR for each of these projects? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) IRR Project A % Project B % a-2 Using the IRR decision rule, which project should the company accept? O Project A O Project B a-3 Is this decision necessarily correct? Yes No b-1 If the required return is 12 percent, what is the NPV for each of these projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) NPV Project A $ Project B $ b-2 Which project will the company choose if it applies the NPV decision rule? O Project A Project B c. At what discount rate would the company be indifferent between these two projects? (Do not round intermediate calculations. Enter your answer as a percent rounded…
The following data are accumulated by Watershed Inc. in evaluating two competing capital investment proposals: Project A Project Z Amount of investment $64,000 $84,000 Useful life 4 years 9 years Estimated residual value 0 0 Estimated total income over the useful life $8,960 $43,470 Determine the expected average rate of return for each project. Round your answers to one decimal place. Project A % Project Z %