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 >

Profitability index = (present value of cash inflows )/Initial investment Net present value is…

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

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B Assume the following information for a capital budgeting proposal with a five-year time horizon: Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket costs This proposal's simple rate of return is closest to: Multiple Choice O 27%. 16%. 19% 11% $ 485,000 $ 300,000 $ 130,000 $ 50,000 $ 40,000
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Year 0 Cash Flow = +$25,000 (assume only 1 change in signs) Project IRR = 4.5% Project DR = 6.0% %3D Should the project be accepted without reviewing NPV? Why or why not? Explain
The management of Riker Inc. is exploring five different investment opportunities. Information on the five projects under study follow Project Number Investment required Present value of cash inflows at a 10% discount rate Net present value Life of the project Project 1 2 3 4 5 Profitability Index 1 2 3 $(390,000) $(330,000) $(350,000) 478,490 396,950 $ 88,490 $ 66,950 6 years 3 years First preference Second preference 433,190 $ (83,190) 5 years The company's required rate of return is 10%; thus, a 10% discount rate has been used in the preceding present value computations. Limited funds are available for investment, and so the company cannot accept all of the available projects. Third preference Fourth preference Fifth preference 4 $(330,000) Required: 1. Compute the profitability Index for each investment project. (Round your answers to 2 decimal places.) 300, 100 $ 29,900 12 years 5 $(480,000) 562,860 $82,860 6 years 2. Rank the five projects according to preference, in terms of (a)…
19 es TB MC Qu. 14-36 (Algo) Moates Corporation has... Moates Corporation has provided the following data concerning an investment project that it is considering: $ 190,000 $ 120,000 per year 4 years 9% Initial investment Annual cash flow Expected life of the project Discount rate Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the project is closest to: Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Multiple Choice $190,000 $198,680 $(70,000)
Consider a project with the following information: Year 1 2 3 4 5 6 Initial outlay= $950,000 Compute the NPV if the company's discount rate is 10%. 1) $268,244 2) $201,650 3) $213,050 $129 After-tax cash flows $300,000 $400,000 $400,000 $200,000 $150,000 $150,000
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Use python to answer the following question: Question 5 A capital investment in an equipment with an upfront cost of $23,540 will provide you with the following annual cash flow stream (paid end of year): 1. $2,000 2. $1,456 3. $3,230 4. $6,850 5. $2,384 6. $1,234 7. $5,987 8. $4,190 The project will incur the following cost for maintenance and repair (paid end of year): Year 3: ($2,984) Year 4: ($1,837) Year 6-8: ($2,000) Calculate the NPV of the investment and comment on whether you should invest in the project. Why or why not? What is the IRR of the investment? The required rate of return is 3.5%.
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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?
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