risky $36,000 investment is expected to generate the following cash flows:   Year 1 2 3   $ 15,750   $ 18,000   $ 21,000     The probability of receiving each cash inflow is 80, 70, and 60 percent, respectively. If the firm’s cost of capital is 6 percent, should the investment be made? Use Appendix D to answer the question. Use a minus sign to enter a negative value, if any. Round your answer to the nearest dollar. NPV: $   The investment  be made

Q: QUESTION 2. Evaluate the following investment project according to the internal rate of return and…

A: Information Provided: WACC = 21% CF (0) = (250,000) CF (1) = (100,000) CF (2) = 1,100,000 (1,250,000…

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A: Net Present Value is the difference between the Present Value of Future Cash flow at the required…

Q: Suppose your firm is considering investing in a project with the cash flows shown below, that the…

A: Internal rate of return refers to the maximum discount rate at which the present value of the cash…

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A: Net Present value is present value of cash flow minus initial investment

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A: The various alternative methods of capital budgeting are enumerated  below:Payback period methodNet…

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A: PI = Present value of future cash flows / Initial invetment

Q: A firm will give a one-time cash flow of $21000 after one year. If the project risk requires a…

A: After one-year one-time cash flow = $21,000Required return = 8%Number of years = 1 years

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A: Disclaimer: “Since you have asked multiple question, we will solve the first question for you. If…

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A: Cash Flow for Year 0 = cf0 = -$108,262.00Cash Flow for Year 1 = cf1 = $11,543.00Cash Flow for Year 2…

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A: The PV of an investment refers to the cumulative value of its cash flows after they have been…

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A: Net present value is difference between present value cash flow and initial investment.

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A: Step 1: The calculation of the present value of cash flows ABCD1YearsCashflow ACashflow BCashflow…

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A: Here we will use the capital budgeting tools of NPV and IRR. NPV is the net present value. It is the…

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A: a.Calculation of the present value of investment:Formula used:

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A: given, r = 12% Initial investment = $100,000 Annual cashflow = $44,524 n = 3 years

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A: NPV: It is the net current worth of cash flows that are expected to occur in the future. It is…

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A: Net present value is the value of an investment in today’s term after adjusting its initial cost.…

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A: At IRR, the NPV is zero.

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A: Calculate present value of cash inflows:

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Q: Quantitative Problem: You own a security with the cash flows shown below. 0 $ 1 2 3 4 0 640 375 250…

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A: Capital budgeting refers to a concept used for estimating the viability of the project using various…

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A: Cash Fow for Year 0 = cf0 = $6500Cash Fow for Year 1 = cf1 = $4750Cash Fow for Year 2 = cf2 =…

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A: Present value = Cash flows*Discounting factor Discounting factor…

Q: 16. You are considering an investment with the following cash flows: Year Cash Flow 0…

A: Year Cash Flow    0 -$50,000    1   $ 7,000    2   $ 4,000    3   $9,000    4   $61,000

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A: The FV of an investment refers to the cumulative worth of the investment's cash flows at a future…

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A: Here,

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A: Internal rate of return:Internal Rate of Return (IRR) is a financial metric that calculates the…

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Q: 1 Jonkin plc are considering a project that is susceptible to risk. An ini investment of £1,300,000…

A: NPV is the net present value which means = Present value of cash inflows - Present value of cash…

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A: Capital budgeting is used to evaluate the different levels of investment projects. The organization…

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A: Present Value is the current price of future value which will be received in near future at some…

Q: Assume an investment is priced today at $5,000 and has the following income stream: Year Cash Flow 1…

A: Solution:Net Present Value (NPV) means the net present value of cash inflows from the project after…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.