REQUIRED Use the information provided below to calculate the following: 5.1 Payback period of both projects (expressed in years, months and days). 5.2 Accounting Rate of Return (on initial investment) of Project Spik (expressed to two decima places). 5.3 Net Present Value of both projects. 5.4 Internal Rate of Return of Project Spik (expressed to two decimal places). Your answer must include two net present value calculations (using consecutive rates/percentages) and interpolation. INFORMATION Telco Ltd had to choose between purchasing machinery for two projects, Spik and Span, for which the following profits are forecast: Year Spik Span

REQUIRED Use the information provided below to calculate the following: 5.1 Payback period of both projects (expressed in years, months and days). 5.2 Accounting Rate of Return (on initial investment) of Project Spik (expressed to two decima places). 5.3 Net Present Value of both projects. 5.4 Internal Rate of Return of Project Spik (expressed to two decimal places). Your answer must include two net present value calculations (using consecutive rates/percentages) and interpolation. INFORMATION Telco Ltd had to choose between purchasing machinery for two projects, Spik and Span, for which the following profits are forecast: Year Spik Span

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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A project has estimated annual net cash flows of $63,800. It is estimated to cost $740,080. Determine the cash payback period. Round the answer to one decimal place.____________ years
A project has an initial cost of $40,000, expected net cash inflows of $12,000 per year for 12 years, and a cost of capital of 12%. What is the project's MIRR? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to two decimal places.
(Related to Checkpoint 11.4) (IRR calculation) Determine the internal rate of return on the following project: An initial outlay of $9,500 resulting in a cash inflow of $1,600 at the end of year 1, $4,700 at the end of year 2, and $7,800 at the end of year 3. This project's internal rate of return is %. (Round to two decimal places.)
Emusk Inc. is evaluating two mutually exclusive projects. The required rate of return on these projects is 8%. Calculate the net present value for project A. (Round to 2 decimals) Year 0 1 2 3 4 5 Project A -15,000,000 2,000,000 3,000,000 5,000,000 5,000,000 6,000,000 Project B -15,000,000 6,000,000 6,000,000 6,000,000 1,000,000 1,000,000
A project requires an increase in inventories, accounts payable, and accounts receivable of $130,000, $95,000, and $65,000, respectively. If opportunity cost of capital is 4% and the project has a life of 14 years, and the working capital investments will be recovered at the end of the life of the project, what is the effect on the NPV of the project? Enter your answer rounded to two decimal places. Enter your response below. Number
Emusk Inc. is evaluating two mutually exclusive projects. The required rate of return on these projects is 8%. Calculate the payback period for project B. (Round to 3 decimals) Year Project A Project B 0 -15,000,000 -15,000,000 1 2,000,000 6,000,000 2 3,000,000 6,000,000 3 5,000,000 6,000,000 4 5,000,000 1,000,000 5 6,000,000 1,000,000
A project has an initial cost of $40,000, expected net cash inflows of $11,000 per year for 7 years, and a cost of capital of 13%. What is the project's MIRR? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to two decimal places.
Assume that the net present value of a project is $ 3870 at 10%, and -$1853 at 12%. Use linear interpolation to compute the rate of return correct to the nearest tenth of a percent. A) 11.2% B) 10.8% C) 10.5% D) 11.9% E) 11.4%
Which of the following is TRUE? O An American call option on a stock should never be exercised early O An American call option on a stock should be exercised early when dividends are expected O It can sometimes be optimal to exercise early an American call option on a stock even when no dividends are expected and there is no liquidity or portfolio rebalancing need. O An American call option on a stock should never be exercised early when no dividends are expected << Previous Next ▸
A project has an initial cost of $50,000, expected net cash inflows of $9,000 per year for 10 years, and a cost of capital of 14%. What is the project's MIRR? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to two decimal places. %
A $1,000 investment in project that returns $100/year for 5 years is to be compared with a $700 investment in a project that returns $90/year for 4 years. What would be a good metric(s) for comparing these projects? A. Equivalent uniform annual cash flow, only. B. Internal rate of return (only correct choice of these options) C. Internal rate of return and equivalent uniform annual cash flow D. Benefit to cost ratio and internal rate of return E. Benefit to cost ratio (only correct choice of these options) Give answer fast and only type answer
A project has an initial cost of $55,000, expected net cash inflows of $13,000 per year for 12 years, and a cost of capital of 8%. What is the project's PI? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to two decimal places.

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