Required:1a. Compute the average rate of return for each investment. If required, round your answer to one decimalplace.Average Rate of ReturnFront-End LoaderGreenhouse1b. Compute the net present value for each investment. Use the present value of $1 table above. If required,round to the nearest dollar. If required, use the minus sign to indicate a negative net present value.Front-End LoaderGreenhousePresent value of net cash flowAmount to be investedNet present value2. Prepare a brief report for the capital investment committee, advising it on the relative merits of the twoinvestments.The front-end loader has anet present value because cash flows occurintime compared to the greenhouse. Thus, if only one of the two projects can be accepted, thewould be the more attractive. Average Rate of Return Method, Net Present Value Method, and Analysis for a service companyThe capital investment committee of Arches Landscaping Company is considering two capital investments. Theestimated operating income and net cash flows from each investment are as follows:Front-End LoaderGreenhouseOperatingNet CashOperatingNet CashYearIncomeFlowIncomeFlow1$55,800$172,000$117,000$275,000255,800172,00089,000232,00055,800172,00045,000163,000455,800172,00020,000112,000555,800172,0008,00078,000Total$279,000$860,000$279,000$860,000Each project requires an investment of $620,000. Straight-line depreciation will be used, and no residual value isexpected. The committee has selected a rate of 12% for purposes of the net present value analysis.Present Value of $1 at Compound InterestYear6%10%12%15%20%10.9430.9090.8930.8700.83320.8900.8260.7970.7560.6940.8400.7510.7120.6580.57940.7920.6830.6360.5720.4820.7470.6210.5670.4970.4020.7050.5640.5070.4320.33570.6650.5130.4520.3760.27980.6270.4670.4040.3270.2330.5920.4240.3610.2840.194100.5580.3860.3220.2470.162Required:la. Compute the average rate of return for each investment. If required, round your answer to one decimalplace.

The data are given for two capital Investments. Required 1 (a) Average Rate of Return for both…

Required: 1a. Compute the average rate of return for each investment. If required, round your answer to one decimal place. Average Rate of Return Front-End Loader Greenhouse 1b. Compute the net present value for each investment. Use the present value of $1 table above. If required, round to the nearest dollar. If required, use the minus sign to indicate a negative net present value. Front-End Loader Greenhouse Present value of net cash flow Amount to be invested Net present value 2. Prepare a brief report for the capital investment committee, advising it on the relative merits of the two investments. The front-end loader has a net present value because cash flows occur in time compared to the greenhouse. Thus, if only one of the two projects can be accepted, the would be the more attractive.

Required: 1a. Compute the average rate of return for each investment. If required, round your answer to one decimal place. Average Rate of Return Front-End Loader Greenhouse 1b. Compute the net present value for each investment. Use the present value of $1 table above. If required, round to the nearest dollar. If required, use the minus sign to indicate a negative net present value. Front-End Loader Greenhouse Present value of net cash flow Amount to be invested Net present value 2. Prepare a brief report for the capital investment committee, advising it on the relative merits of the two investments. The front-end loader has a net present value because cash flows occur in time compared to the greenhouse. Thus, if only one of the two projects can be accepted, the would be the more attractive.

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

Determine the future value of the following single amounts. Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Invested Amount i- n Future Value 1. $ 11,500 7% 15 23 $ 15,000 6% 14 $ 28,000 12% 14 4. S 48,000 8% 6
Problem #2: Consider an investment where the cash flows are: - $920.33 at time 1 = 0 (negative since this is your initial investment) S407 at time = 1 in years $222 at time = 2 in years $426 at time = 3 in years (a) Use Excel's "Solver" to find the internal rate of return (IRR) of this investment. Take a screen shot showing Solver open with your entries for the function clearly visible. Paste the screen shot into an application (like Paint), and save it as a (.png) file. Upload your screenshot below. (b) What is the value of IRR found by Solver?
The rate of return that equates the present value of cash inflows and outflows is the: A. hurdle rate.B. desired rate of return.C. internal rate of return. D. minimum rate of return.
You identify an investment project with the following cash flows. If the discount rate is 10%, what is the present value of these cash flows? Y1- $500 Y2- $550 Y3- $800 Y4- $450. Please type answer no write by hend.
Consider the following cash flows: Year Cash Flow 0 –$ 32,500 1 14,300 2 17,400 3 11,700 What is the IRR of the cash flows? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Consider the following cash flows: Year 0 1 2 Cash Flow -$ 32,500 13,800 17,900 11, 200 What is the IRR of the cash flows? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Internal rate of return %
Consider the following cash flows: Year Cash Flow 0 1 2 3 $19,400 10,400 9,320 6,900 What is the IRR of the above set of cash flows? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Internal rate of return 4 Prev
1. Determine the Payback period using after-tax cash flows: 2. Determine the Net present value using after-tax cash flows (use 3 decimal places for the PV factor)
Damien offers you a sequence of end-of-year cash flows for an investment as follows: Year 1 2 3 4 4 What is the value of the cash flows if the opportunity cost is 6 percent? (Round to the nearest dollar). Please click on the following link to access a blank worksheet Click to open:: O $8.392 $8.598 Cash Flow $4,000 $3,000 $2,000 $1,000 $8.734 $8.915
This graph shows the net present value of an investment with annual cash flows of -$1,000, $100, $300, $400, and $675 as a function of different costs of capital (interest %). Note that this cash flow returns increasing amounts after the initial investment. Drag left or right on the graph to move the cursors to see the net present value (NPV) for different costs of capital. The point where the curve crosses the X-axis determines the internal rate of return (IRR). (Note: due to limited pixel resolution, it is sometimes difficult to get to that precise point.)
a. Find the present values of the following cash flow streams at a 6% discount rate. Do not round intermediate calculations. Round your answers to the nearest cent. 1 3 4 Stream A $0 $150 $400 $400 $400 $300 Stream B $0 $300 $400 $400 $400 $150 Stream A: $ Stream B: $ b. What are the PVs of the streams at a 0% discount rate? Round your answers to the nearest dollar. Stream A: $ Stream B: $
For the investment shown in the following table, calculate the total return earned over the unspecified time period. Cash flow during period Beginning-of- period value End-of- period value −$10 $3,200 $2,800 The total return on the investment is __%.