Please correct answer and don't use hand rating Project B cost is expected to cost R5 100 000 including R400 000 for installation. The annualcash flows are estimated to be R1 020 000 per yearQuestion 1 calculate the IRR of the project using discount rates of 17% and 18% only.

To calculate the Internal Rate of Return (IRR) for Project B using discount rates of 17% and 18%, we…

Answered: Project B cost is expected to cost R5…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 15EA: Project A costs $5,000 and will generate annual after-tax net cash inflows of $1,800 for five years....

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Similar questions

A certain project with annual benefit of P 50,000 at the end of each year for a period of 6 years. Assuming money is 10% and benefit ratio is 1.02, compute the cost of the project. a. P426,896.00 b. P426,986.00 c. P426,968.00 d. P462,986.00
If a project requires a $1000 initial investment, it returns $500 at the end of the first year, $600 at the end of the second year, $700 at the end of the third year, and -$500 in the fourth year. Calculate MIRR for this project if the discount rate is 9% O 10.45% O 14.77% 15.96% O 11.99%
Project A requires a $405,000 initial investment for new machinery. Project A is expected to yield income of $25,200 per year and net cash flow of $97,600 per year for the next five years. Compute Project A's payback period. Payback Period Numerator: 1 Denominator: = Payback Period = Payback period = 0
Determine the B/C ratio for the following project.First Cost = P100, 000Project life, years = 5Salvage value = P10, 000Annual benefits = P60, 000Annual O and M = P22, 000Interest rate= 15%
Compare the following alternatives based on the rate of return analysis assuming that the MAAR is 15% per year. Project A Project B Initial Cost $60.000 $90.000 Annual cost of operation 15.000 8.000 Annual cost of reparation 5.000 2.000 Annual increase of the repair 1.000 1.500 Salvage value 8.000 12.000 Life, years 15 15
A project with the following costs are under consideration to determine its profitability. Using the IRR comparison, and an annual MARR of 10% compounded semiannually, determine if the project should be executed. First cost Semiannual operating cost Semiannual income Salvage value Life in years a. IRR = 18.7% semiannual O b. IRR = 15.3% semiannual Oc. IRR = 16.9% semiannual Od. IRR = 17% semiannual : $45,000 : $10,000 : $20,000 : $20,,000 : 4 years
What’s the EAS equivalent annual series for project A?
An equipment with a cost of P 100 000 is expected to generate returns of P 90 000; P 60 000 and P 50 000 for the first, second and third year, respectively. Using a discount rate of 12%, what is the NPV of the project? а. Р 60 121 b. Р 79 341 c. P 83 431 d. P 63 778
A project needs an initial investment of $100 and generates -$20 and $130 in year 1 and 2 respectively. What is the MIRR using the discounting method (WACC=10%)? 4.67 4.79 4.85% 4.88% Selected
Determine the B/C ratio for the following project. First Cost P100, 000 Project life, years 5 Salvage value P10, 000 Annual benefits Р60, 000 Annual O and M Р22, 000 Interest rate, % 15
Determine the ROR, AW, and PP of the following engineering project when the MARR is 20% per year. Is the project acceptable? Engineering Project Details Investment cost $60,000 Expected life 7 years Annual receipts $15,000 Annual expenses $2,675.40 a. The Rate of Return of the project is ? Write the answer in percentage value, up to 2 decimal places. b. How much is the cash flow excess? Roundoff answer to the whole number. c. The payback Period is Write the answer in two decimal places.
A PROJECT IS ESTIMATED TO COST P 100,000.00, LASTS 8 YEARS, AND HAVE A P 10,000.00 SALVAGE VALUE. THEANNUAL GROSS INCOME IS EXPECTED TO AVERAGE P 24,000.00 AND ANNUAL EXPENSES, EXCLUDINGDEPRECIATION, WILL TOTAL P 6,000.00. IF CAPITAL IS EARNING 10% BEFORE INCOME TAXES, DETERMINE IFTHIS IS A DESIRABLE INVESTMENT USING:A.) RATE-OF-RETURN METHODB.) ANNUAL COST METHODC.) PRESENT-WORTH COST METHOD

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Project B cost is expected to cost R5 100 000 including R400 000 for installation. The annual cash flows are estimated to be R1 020 000 per year Question 1 calculate the IRR of the project using discount rates of 17% and 18% only.