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 B C с D $ 130,000 $ 107,000 $ 100,000 $ 174,000 Present Value of Cash Inflows $ 219,323 $ 192,000 $ 150,035 $ 228,136 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 Required 2 Project 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. A B Life of the Project (years) 7 12 Complete this question by entering your answers in the tabs below. C D 7 3 Internal Rate of Return 218 17% 16% 22% Compute the profitability index for each project. (Round your answers to 2 decimal places.) 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: Investment Project Required A B C с D $ 130,000 $ 107,000 $ 100,000 $ 174,000 Present Value of Cash Inflows $ 219,323 $ 192,000 $ 150,035 $ 228,136 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 Required 2 Project 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. A B Life of the Project (years) 7 12 Complete this question by entering your answers in the tabs below. C D 7 3 Internal Rate of Return 218 17% 16% 22% Compute the profitability index for each project. (Round your answers to 2 decimal places.) Profitability Index

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Management of Ivanhoe Measures, Inc., is evaluating two independent projects. The company uses a 13 percent discount rate for such projects. The costs and cash flows for the projects are shown in the following table. Year Project 1 Project 2 0 $8,812,840 -$10,781,200 1 3,363,400 2,021,330 2 1,788,290 3,848,800 3 1,367,600 3,173,090 4 1,088,900 4,104,310 5 1,111,380 4,130,780 6 1,723,940 7 1,319,290 k A What are their NPVs? (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to O decimal places, e.g. 1,525.) Q Ac The NPV of Project 1 is $ and the NPV of Project 2 is $ Qu Mu
Monroe, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this project. Cost and cash flows are shown in the table. What is the NPV of the project? Year0 ($11,368,000)1 $2,112,5892 $3,787,5523 $3,300,6504 $4,115,8995. $ 4,556,424 Round to two decimal places. For year 0 , its initial investment .
Subject: accounting
Monroe, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this project. Cost and cash flows are shown in the table. What is the NPV of the project? Year Project 0 ($11,368,000) 1 $ 2,127,589 2 $ 3,787,552 3 $ 3,125,650 4 $ 4,115,899 5 $ 4,556,424 Round to two decimal places.
Oxford Company has limited funds available for investment and must ration the funds among the four competing projects shown below: Project InvestmentRequired PresentValue of Cash Inflows Life oftheProject(years) InternalRateof Return A $ 170,000 $ 329,323 7 12% B $ 118,000 $ 302,000 12 17% C $ 105,000 $ 260,035 7 16% D $ 165,000 $ 338,136 3 15% The net present values above have been computed using a 10% discount rate. Required: Compute the profitability index for each project. In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return
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The Fritz Co. is considering a new project and asked the chief accountant to review potential changes to the net working capital accounts should the project be adopted. The accountant’s report is as follows: Current Projected Inventory $ 99,218 $ 75,000 Accounts receivable $ 89,430 $110,000 Accounts payable $ 58,640 $ 50,000 What amount should be included in the initial cash flow of the project for net working capital?
Monroe, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this project. Cost and cash flows are shown in the table. What is the NPV of the project? Year Project 0 (S 11,368, 000) 1 $ 2, 202, 589 2 $ 3,787, 552 3 $ 3, 300, 650 4 $ 4, 115, 899 5 $ 4, 556, 424 Round to two decimal places.
What is the profitability index of a project that costs $10,000 and provides cash flows of $3,600 in years 1 and 2 and $5,600 in years 3 and 4? The discount rate is 9% Note: Do not round intermediate calculations. Round your answer to 4 decimal places. Answer is complete but not entirely correct. Profitability index 1.4624
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