Philnet Inc. is considering a project that has the following after-tax operating cash flows (in millions of dollars): Project Year Cash Flows -$300 1 125 75 200 4 100 Philnet Inc's finance department has concluded that the project has a 10 percent cost of capital. What is the project's discounted payback period? O 2.65 years O 2.50 years O 2.00 years O 2.83 years O 3.00 years 2.

Philnet Inc. is considering a project that has the following after-tax operating cash flows (in millions of dollars): Project Year Cash Flows -$300 1 125 75 200 4 100 Philnet Inc's finance department has concluded that the project has a 10 percent cost of capital. What is the project's discounted payback period? O 2.65 years O 2.50 years O 2.00 years O 2.83 years O 3.00 years 2.

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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JB Manufacturing is considering a project with the following after-tax operating cash flows (in millions of dollars): Years Projected Cash Flow ($300) 125 75 200 100 2 4 The project has a WACC of 10%. What is the project's discounted payback period? 3.00 years 2.67 years 2.83 years 2.50 years 2.00 years
HSJ Foods is getting ready to produce a new line of products by investing 185000 OMR. The investment will result in additional cash flows of 52500 OMR , 81250, and 120000 over the next three years. What is the payback period for this project? Select one: a. 1.53 years b. 1.84 years c. 2.62 years d. None of these e. 2.42 years
Ruby's Corporation is considering two mutually exclusive projects with useful life of 4 years. The after-tax cash flows for projects Q and P are listed below. Table 2 Year Cash Flow Q (RM) (60,000) 30,000 20,000 20,000 10,000 Cash Flow P (RM) (70,000) 10,000 20,000 30,000 40,000 1 2 4 Assuming the expected rate of return on the investment is estimated at 10%. Required to: a. calculate the payback period for each project. b. calculate the net present value for each project. С. based on the two investment techniques, which project should be accepted?
Your company is currently considering two investment projects. Each project requires an upfront expenditure of $25 million. You estimate that the cost of capital is 10% and the investments will produce the following after tax cash flows: Year Project A Project B 1 $5,000,000 $20,000,000 2 $10,000,000 $10,000,000 3 $15,000,000 $8,000,000 4 $20,000,000 $6,000,000 a) Calculate the payback period for both projects, then compare to identify which project the firm should undertake. [Note: you are supposed to show every step of your calculation and interpret the result.] b) Evaluate the advantages and disadvantages of using the payback method in investment decisions and assess the situations where it should be used. [Note: remember to use Harvard referencing to reference your sources]
Prestwood Products Company's cost of capital is 11.2% and the company is considering two mutually exclusive projects. In the past, it usually takes about 5 years for the company to recoup its investments from a good project. The projects' expected cash flows are as follows: What is project A's payback period?
Please help me with show all calculation thanku
Compute the payback statistic for Project A if the appropriate cost of capital is 9 percent and the maximum allowable payback period is four years. (Round your answer to 2 decimal places.) Project A Time: 0 1 2 3 4 5 Cash flow: −$2,100 $790 $810 $740 $520 $320 Payback: ? Years
R-Kraine Inc. is considering acquiring an existing project (with financial backing from the government). The project is expected to have another 8 (full) years of economic life. The project's year-end cash flows are as follows: Years 1-4: $2m each year Years 5-8: $500,000, $2m, $500,000 and $2m (respectively) Suppose the relevant discount rate for the project could be estimated from the following cash flows of an 8-year (fixed) coupon bond issued by R-Kraine a couple of months ago: Current market price (per unit): $584,608.5676 Face value (per unit): $800,000 Yearly coupon payments: $72,000 Calculate the YTM of the bond. [Hint: State clearly the relevant numerical formula and then crunch out the answer using Excel program or financial calculator. The answer can also be solved with a scientific calculator using a manual trial-and-error approach as the YTM was set to be an integer.] a)
1. Google, Inc., uses a maximum payback period of 6 years and currently must choose between two mutually exclusively projects. Project Alpha requires an initial outlay of BD 24000; project Beta requires an initial outlay of BD44000. Using the expected cash inflows given for each project in the following table. Expected cash flow Year Project Alpha Project Beta 1 BD6000 BD19000 2 BD9000 BD6000 3 BD4000 BD4000 4 BD6000 BD13000 5 BD3500 BD5000 6 BD2000 BD4000 Required: 1. Determine the payback period of each project 2. Because they are mutually exclusive, Google must choose one. Which should the company invest in? 3. Explain why one of the projects is the better choice than the other
Green Day Corp. has a project with the following cash flows: Year Cash FlowS 0 -$25,400 1 9,750 2 234 13,900 8,760 4 -2,800 What is the MIRR for this project using the reinvestment approach? The interest rate is 7 percent
1. You are evaluating a project that will require an initial investment of $350. Over the next four years, the project is expected to generate after-tax cash flows of 22, 34, 41, 46. If 6% is your appropriate discount rate, what is the IRR of this project to the nearest hundredth (.01)? -19.06% 0.18% 3.83% -25.79%
Boomerang Bungee Corp. is considering the following project. Determine the equal annual annuity for the project if the cost of capital is 14%. Initial Investment: $75,000 Year Cash Inflows 1 $30,000 2 $35,000 3 $40,000 a. $2,259.62 b. $4,355.25 c. $7,768.67 d. $5,527.89

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