Problem 5-3 Calculating Discounted Payback An investment project has annual cash inflows of $3,500, $4,400, $5,600, and $4,800, for the next four years, respectively. The discount rate is 14 percent. a. What is the discounted payback period for these cash flows if the initial cost is $6,200? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the discounted payback period for these cash flows if the initial cost is $8,300? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the discounted payback period for these cash flows if the initial cost is $11,300? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Discounted payback period b. Discounted payback period c. Discounted payback period years years years

Problem 5-3 Calculating Discounted Payback An investment project has annual cash inflows of $3,500, $4,400, $5,600, and $4,800, for the next four years, respectively. The discount rate is 14 percent. a. What is the discounted payback period for these cash flows if the initial cost is $6,200? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the discounted payback period for these cash flows if the initial cost is $8,300? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the discounted payback period for these cash flows if the initial cost is $11,300? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Discounted payback period b. Discounted payback period c. Discounted payback period years years years

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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Suppose you are offered a project with the following payments: Year Cash Flows 0 $ 9,800 1 −5,300 2 −4,000 3 −3,100 4 −1,700 a. What is the IRR of this offer? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. If the appropriate discount rate is 15 percent, should you accept this offer? c. If the appropriate discount rate is 21 percent, should you accept this offer? d-1. What is the NPV of the offer if the appropriate discount rate is 15 percent? Note: 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. d-2. What is the NPV of the offer if the appropriate discount rate is 21 percent? Note: 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.
Problem 6. Justine Global Info Tech records the following cash flows at the end of each year for a project. If the firm's discount rate is 11%, what is the PRESENT VALUE of the project? Year Cash Flow 1 P794,633.00 P542,149.00 P836,200.00 P716,080.00 P520,354.00 2 3 4 5
Question 6 A project has expected cash inflows, starting with year 1, of $2,200, $2,900, $3,500 and finally in year four, $4,000. The profitability index is 1.14 and the discount rate is 12 percent. What is the initial cost of the project? Group of answer choices $9,211.06 $9,250.00 $8,166.19 $7,899.16 $8,098.24
Suppose you are offered a project with the following cash flows: Year Cash Flows 0 1 2 3 4 $8,800 -4,800 -3,500 -2,600 -1,400 a. What is the IRR of this offer? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) IRR % O Accept O Reject ☆ b. If the appropriate discount rate is 13 percent, should you accept this offer? c. If the appropriate discount rate is 25 percent, should you accept this offer?
Activity 7.5. Remediation You are considering a project with an initial cost of P7.8M. Find the payback period and the NPV for this project if the cash inflows are P1.1M, P1.64M, P3.8M, and P4.5Ma year over tenext four years, respectively. Cost of Capital is 6.5%.
Intro Office Min is considering several risk-free projects: Project Initial cash flow Cash flow in 1 year A -8,100 9,720 -4,000 4,200 -6,500 7,475 B C The risk-free interest rate is 10%. Part 1 What is the NPV of project A? 0+ decimals Submit Part 2 What is the NPV of project B? 0+ decimals Submit Part 3 What is the NPV of project C? 0+ decimals Submit Part 4 Which projects should the company accept? Check all that apply: O Project C Project A Project B Submit
Please help answer From Question 3.1 to 3.5 REQUIREDStudy the information provided below and calculate the following:3.1 Payback Period of Project A (answer expressed in years, months and days). 3.2 Accounting Rate of Return (on average investment) of Project B (answer expressed totwo decimal places).3.3 Net Present Value of both projets (amounts rounded off to the nearest Rand). 3.4 Benefit Cost Ratio of Project A (answer expressed to three decimal places). 3.5 Internal Rate of Return of Project B (answer expressed to two decimal places). INFORMATIONThe following information relates to two possible capital expenditure projects being considered by EdamLtd. Because of capital rationing, only one project can be accepted.Project A Project BInitial cost R800 000 R800 000Expected useful life 5 years 5 yearsAverage annual profit R80 000 R80 000Expected net cash inflows: R RYear 1 240 000 240 000Year 2 260 000 240 000Year 3 280 000 240 000Year 4 220 000 240 000Year 5 200 000 240 000The…
A project has the following cash flows set out below. What is the profitability index of this project if the relevant discount rate is 2 percent? Enter your final answer to two decimal places. Year Cash flow 0 -1,745 1 537 2 2,066 3 3,912
A potential project provides the following: Initial Investment = 36,101 Annual cash Flows = 12,101 period= 5 years What is the discount rate If NPV = 0? Answer in the format: #0.00 Answer as a percentage but without the % sign Example 0 0651 is entered as 6.51 Do not round intermediary calculations. Use full precision of your calculator or Excel. Do not include commas or dollar signs. Round properly to two decimal places Example: .157835 would be .16 Example: 2.3491 would be entered 2.35 HINT: Be sure your answer is percentage
Consider projects A and B with the following cash flows: Ce $32 57 $16 +$16 + 32 +$ 16 32 a-1. What is the NPV of each project if the discount rate is 12%? (Do not round intermediate calculations. Round your answers to 2 decimal places.) 6-2. Which project has the higher NPV? b-1. What is the profitability Index of each project? (Do not round intermediate calculations. Round your answers to 2 decimal places.) b-2. Which project has the higher profitablity index? c. Which project is most attractive to a firm that can ralse an unlimited amount of funds to pay for its investment projects? d. Which project is most attractive to a firm that is limited in the funds it can ralse? ok nt mces Project A Project B a-1. NPV of ench project if the discount rate is 12% a-2. Which project has the higher NPV? b-1. Profitability index of each projoct b-2. Which project has the higher protitability index? Which project is most attractive to a firm that can raise an unlimited amount of funds to pay for…
A project has the following cash flows: Year Cash Flow 0 –$ 16,100 1 6,800 2 8,100 3 6,600 a. What is the NPV at a discount rate of zero percent? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the NPV at a discount rate of 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the NPV at a discount rate of 20 percent? (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.) d. What is the NPV at a discount rate of 29 percent? (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.)
QUESTION 2 You expect to receive $100 in year 1, $150 in year 2, and $200 in year 3 if you invest in Project XYZ. The project requires you to make an initial investment of $150 in year 0. You also expect to incur the following expenses: $80 in year 1, $80 in year 2, $100 in year 3. Suppose the current discount rate is 10% and remain the same. Suppoe all cash flows are incurred at the end of each year. What is the dynamic payback period? (round to 2nd decimal place)

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