Problem 2A company that manufactures many types of plastic products, used packaging andwrapping. If the company's cash flow (in thousand) for one of its product divisions is asshown below. Determine (a) the number of possible I values and (b) all rate of returnvalues between 0% and 100%.Year0123456NCF, $-30-2-69+21+30+18+40

The objective of the question is to determine the number of possible Internal Rate of Return (IRR)…

Answered: Problem 2 A company that manufactures…

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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Solve Problem 20.17 using Excel.
Cash Flow (1,650,000) 330,000 365,000 380,000 415,000 405,000 370000 294,000 Insert your answer. 5. If a company has a required rate of return of 15%, should the following project be accepted based on these expected cash flows below?
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
Which of the following is a section of a cash flow statement? Select one: a.Fixed costs outflows b.Cash basis accounting systems c.Wage taxes d.EIN Question 22 Question text If you invest $1,525,000 in a business and earn a return of $775,000, what is your ROI? Select one: a.42% b.45% c.51% d.1.96% Question 23 Question text If Jacques invests $20,000 at 10% interest for 3 years, what will the future value of the money be? Select one: a.$26,620.00 b.$6620.00 c.$20,606.02 d.$26,000.00 Question 24 Question text Two common risks to cash flow stability are ________ and ________. Select one: a.credit squeeze; burn rate b.surplus inventory; pilferage c.burn rate; pilferage d.surplus inventory; credit squeeze Question 25 Question text A suggested allowance for contingencies and emergencies at start-up is _____ of estimated start-up costs. Select one: a.5 percent b.10 percent c.25 percent d.40 percent
Please solve question 2 with excel function PV, thanks
Use the cash flows and competitive spreads shown in the table below. ($ millions) Year 0 Year 1 Year 2 Years 3–10 Investment 190 Production (millions of pounds per year) 0 0 49 89 Spread ($ per pound) 1.04 1.04 1.04 1.04 Net revenues 0 0 50.96 92.56 Production costs 0 0 39.00 39.00 Transport 0 0 0 0 Other costs 0 29 29 29 Cash flow –190 −29 –17.04 24.56 NPV (at r = 6%) = 0 Assume the dividend payout ratio each year is 100%.a. Calculate the year−by−year book and economic profitability for investment in polyzone production. Assume straight−line depreciation over 10 years and a cost of capital of 6%. (Negative answers should be indicated by a minus sign. Leave no cells blank − be certain to enter "0" wherever required. Do not round intermediate calculations. Enter your income answers in millions rounded to 2 decimal places and enter the rate of return as a percent rounded to 2 decimal places.)…
Problem 10.05 Your answer is partially correct. Try again. Sheridan Incorporated management is considering investing in two alternative production systems. The systems are mutually exclusive, and the cost of the new equipment and the resulting cash flows are shown in the accompanying table. The firm uses a 8 percent discount rate for production system projects. Year System 1 System 2 -$14,800 -$46,900 1 14,800 34,900 2 14,800 34,900 14,800 34,900 Calculate NPV. (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors. Round answers to 2 decimal places, e.g. 15.25.) 38082.31 77802.20 NPV of System 1 is $ and NPV of System 2 is $
Question 2 Consider a 100,000 sqf office building with the following cash flows: The gross rent in year 1 is $30/sqf/year and the rents are expected to grow at 2% per year. The operating expenses in the first year are $5/sqf/year and are expected to increase at 3% per year. There are no capital expenditures. All cash flows are in arrears. The discount rate for the property is 9%. a. What is the value of the building if the building will be held and rented indefinitely? What is the cap rate at time 0? b. What is the value of the building if the building is sold at the end of 10 years at a 8% cap rate? What is the cap rate at time 0?
Chapter 12 problem: Use the following information to determine cash flows for Company ABC. After you find the cash flows, also calculate NPV, IRR, and payback period: Equipment Cost Equipment purchase price: $250,000 Changes in net operating working capital Inventories will rise by $25,000 Accounts payable will rise by $5,000 Effect on operations New sales: 100,000 units/year @ $2/unit Variable cost: 75% of sales Life of the project Economic life: 4 years Salvage value: $30,000 WACC: 15% Tax Rate: 25%

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