ProjectABCDInvestmentRequired$200,000$ 152,000$ 100,000$ 170,000Presentvalue ofCash Inflows$ 279,323$ 252,000$ 210,035$ 288, 136ProjectThe net present values should be computed using a 10% discount rate. The company wants your assistance in determiningwhich project to accept first, second, and so forth.Required 1 Required 2ABCDLife oftheInternalProject Rate of(years) Return716%21%20%19%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.1273Compute the profitability index for each project. (Round your answers to 2 decimal places.)ProfitabilityIndex< Prev4 of 6Check my workwwwNext >3 CD$ 100,000$ 170,000$ 210,035$ 288,136The net present values should be computed using a 10% discount rate. The company wants your assistance in determiningwhich project to accept first, second, and so forth.Required 1Required: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.Required 273Complete this question by entering your answers in the tabs below.First preferenceSecond preferenceThird preferenceFourth preference20%19%In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return.Net Present ProfitabilityValueIndex<< PrevInternal Rateof ReturnRequired 14 of 6HHHRequired 2Next >

Project A B C D Investment Required $ 200,000 $ 152,000 $ 100,000 $ 170,000 Present value of Cash Inflows $ 279,323 $ 252,000 $ 210,035 $288,136 Project Required 1 Required 2 A B C D Life of the Internal Project Rate of (years) 7 12 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. 7 3 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. Profitability Index Return 16% 21% 20% 19% Compute the profitability index for each project. (Round your answers to 2 decimal places.) < Prev 4 of 6 Check my work www. www ‒‒‒ Next >

Project A B C D Investment Required $ 200,000 $ 152,000 $ 100,000 $ 170,000 Present value of Cash Inflows $ 279,323 $ 252,000 $ 210,035 $288,136 Project Required 1 Required 2 A B C D Life of the Internal Project Rate of (years) 7 12 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. 7 3 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. Profitability Index Return 16% 21% 20% 19% Compute the profitability index for each project. (Round your answers to 2 decimal places.) < Prev 4 of 6 Check my work www. www ‒‒‒ Next >

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

Porter Company is analyzing two potential Investments. Project X $ 97,090 Initial investment Net cash flow: Year 1 Year 2 Year 3 Year 4 Multiple Choice If the company is using the payback period method, and it requires a payback of three years or less, which project(s) should be selected? O 32,500 32,500 32,500 0 Both X and Y are acceptable projects. O Project Y. Project Y $ 77,000 Project Y because it has a lower Initial Investment. Project X 5,700 34,500 34,500 25,000 Neither X nor Y is an acceptable project.
3) Consider the following two projects: Net Cash Flow Each Period Initial Outlay 1 2 3 4 Project A $4,000,000 $2,003,000 $2,003,000 $2,003,000 $2,003,000 Project B $4,000,000 0 0 0 $11,000,000 Calculate the net present value of each of the above projects, assuming a 14 percent discount rate. What is the internal rate of return for each of the above projects? Compare and explain the conflicting rankings of the NPVs and IRRs obtained in parts a and b above. If 14 percent is the required rate of return, and these projects are independent, what decision should be made? If 14 percent is the required rate of return, and the projects are mutually exclusive, what decision should be made?
Harris Corporation has provided the following data concerning an investment project that it is considering: Initial investment Annual cash flow Salvage value at the end of the project Expected life of the project Discount rate $ 160,000 $ 54,000 $ 11,000 O $67,000 O $160,516 O $516 O $(5,776) 4 15 per year years % Use Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the project is closest to:
NPV and EVA A project cost $3.2 million up front and will generate cash flows in perpetuity of $270,000. The firm's cost of capital is 8%. a. Calculate the project's NPV. b. Calculate the annual EVA in a typical year. c. Calculate the overall project EVA. a. The project's NPV is $. (Round to the nearest dollar.) ibra culat ource Enter your answer in the answer box and then click Check Answer. Check Ans udy Clear All 2 parts remaining Lation Tools> pe here to search
You are given the following cash flow information for Project A TV Inflows Year 0 PV Outflows -$150,000.00 1 Project A -$150,000.00 $80,000.00 -$25,000.00 $50,000.00 2 $80,000.00 -$30,000.00 $75,000.00 Totals 3 4 5 6 O 19.33% $75,000.00 Now assume that the project's cost of capital is 16.0 percent, but that its true reinvestment rate is 24.0 percent. Given this information, determine the project's modified internal rate of return (MIRR). Ⓒ 18.56% 5 pts
An interior design studio is trying to choose between the following two mutually exclusive design projects: Year 0 1 2 3 Cash Flow Cash Flow (0) -$64,000 31,000 31,000 31,000 a-1 If the required return is 10 percent, what is the profitability index for both projects? (Round your answers to 3 decimal places. (e.g., 32.161)) Project I Project II -$18,000 9,700 9,700 9,700 Profitability Index a-2 If the company applies the profitability index decision rule, which project should the firm accept? O Project I O Project II Project I Project II b-1 What is the NPV for both projects? (Round your answers to 2 decimal places. (e.g., 32.16)) O Project I Project II NPV b-2lf the company applies the NPV decision rule, which project should it take?
Coffer Company is analyzing two potential investments. Project X Cost of machine Net cash flow: Year 1 Year 2 $ 85,470 Project Y $ 65,000 33,000 33,000 3,000 30,000 Year 3 Year 4 33,000 0 • 30,000 25,000 If the company is using the payback period méthod, and it requires a payback period of three years or less, which project(s) should be selected? Multiple Choice Project Y. Project X. Both X and Y are acceptable projects. Neither X nor Y is an acceptable project.
"Consider the following two mutually-exclusive alternatives: Project Alternatives n Project A1 Cash Flows Project A2 Cash Flows $14,000 -$17,000 +$21,000 1 + $4,000 2+ $4,000 +$12,000 If MARR=15% and assuming indefinite required service and repeatability, use the incremental NPV and IRR analyses in parts (a) and (b) of the problem, respectively, to choose the project in part (c). Please note that project alternatives A1 and A2 have different lives, namely three years for A1 and one year for A2. The alternatives should be compared over the same period, so project A2 will have to be repeated twice." (a) The Net Present Value of the incremental investment is: (b) The Internal Rate of Return of the incremental investment is: (c) We should choose project alternative: + Note: Please enter your answers to two decimal places. If using the interest factor method, apply the value of the factor as presented in the table or spreadsheet (with all four decimal places).
ok ht ences A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows: Year 0 1 2 3 Cash Flow IRR -$27,400 11,400 14,400 10,400 If the required return is 16 percent, what is the IRR for this project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) % Should the firm accept the project? Yes O No
The following information is available on two mutually exclusive projects. Project Year 0 Year 1 Year 2 Year 3 Year 4 A -$700 $200 $300 $400 $500 B -$700 $600 $300 $200 $100 If the required rate of return is 10%, which project should be selected using the net present value (NPV) method? Group of answer choices A B
Moates Corporation has provided the following data concerning an investment project that it is considering: Initial investment Annual cash flow $310,000 $137,000 per year Expected life of the project Discount rate 4 years 11% Click here to view Exhibit 120-1 and Exhibit 120-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the project is closest to: Multiple Choice $310,000 $115,111 $(173.000)
7 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 ts Time: 1 2 3 4 5 Cash flow: -$2,400 $910 $900 $800 $580 $380 Print Payback years ferences Should the project be accepted or rejected? аccepted rejected