Supplying missing data: Fill in the blanks for each of the following independent project Assume in all cases the project has a useful life of 10 years Project 1 2 3 4 Annual cash inflow $100,000 $70,000 (g) Initial Cost of investment capital $449,000 (c) $200,000 $300,000 14% 14% (f) 12% IRR 20% 14% (h) NPV (b) (d) $35,624 $39,000

Supplying missing data: Fill in the blanks for each of the following independent project Assume in all cases the project has a useful life of 10 years Project 1 2 3 4 Annual cash inflow $100,000 $70,000 (g) Initial Cost of investment capital $449,000 (c) $200,000 $300,000 14% 14% (f) 12% IRR 20% 14% (h) NPV (b) (d) $35,624 $39,000

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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Information on four investment proposals is given below: Investment Proposal A B C D Investment required $ (330,000) $ (40,000) $ (190,000) $ (2,380,000) Present value of cash inflows 480,000 56,500 286,700 3,178,500 Net present value $ 150,000 $ 16,500 $ 96,700 $ 798,500 Life of the project 5 years 7 years 6 years 6 years Required: 1. Compute the profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference.
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Information for two alternative projects involving machinery investments follows: Project 1 Initial investment Salvage value Annual income $ (128,000) Ө Project 2 $ (98,000) 18,000 14,080 11,600 a. Compute accounting rate of return for each project. b. Based on accounting rate of return, which project is preferred? Complete this question by entering your answers in the tabs below. Required A Required B Compute accounting rate of return for each project. Project 1 Project 2 Numerator: Accounting Rate of Return Denominator: Required A Required B Based on accounting rate of return, which project is preferred? Based on accounting rate of return, is preferred. = Accounting rate of return
nformation on four investment proposals is given below: Investment Proposal A B C D Investment required $ (900,000) $ (170,000) $ (90,000) $ (1,430,000) Present value of cash inflows 1,263,600 233,400 136,500 1,908,300 Net present value $ 363,600 $ 63,400 $ 46,500 $ 478,300 Life of the project 5 years 7 years 6 years 6 years Required: 1. Compute the profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference.
The following table contains information about four potential investment projects that Castle Corporation is considering. Payback Period Required Investment $ 900,000 $ 1,150,000 $ 1,400,000 $ 1,900,000 Project B с D Project Life 5 Required 1 ARR 39.00% 21.00% 22.50% 22.20% Complete this question by entering your answers in the tabs below. 1st preferred 2nd preferred 3rd preferred 4th preferred 3.6 4.8 4.5 2.5 Required: 1. Rank the four projects in order of preference under each method indicated by the headers: 2. Which method is the best for evaluating the investments? Profitability Index 2.19 1.98 1.61 1.56
4. A company is considering one of the following 3 mutually exclusive alternatives. Project Initial Investment operating Cost per year Revenue per year Salvage value Life (years) A B $63,000.00 $61,000.00 $15,000.00 $11,000.00 $38,000.00 $26,000.00 $12,000.00 $17,500.00 6 4 C $85,000.00 $13,000.00 $35,000.00 $16,000.00 12 If the company uses a MARR of 8%, which of the alternatives will they select using Present Worth Analysis?
Year 0 ($100,000)-Project Outlay (The bracket indicates a negative figure) Year 1 Year 2 Year 3 Year 4 Year 5 $ 18,000 $ 18,000 $18,000 $18,000 $ 18,000 Assume that cash flows are reinvested at the rate of 10%, compounded annually. Calculate the Modified Internal Rate of Return (MIRR) on this project. (Note that n=5) a 18.96% b 18% c 15.98% d 19.2%
Give typed solution only What is the internal rate of return of a project costing $3,000; having after-tax cash flows of $1,500 in each of the two years of its two-year life; and a salvage value of $800at the end of the second year in addition to the $1,500 cash flow? (rounded to the nearest percentage) A. 13% B. 15% C. 16% D. 19%
None
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The following information is provided by Doppler Systems: Project A Project B Project C Project D Initial investment $440,000 $202,000 $550,000 $506,000 PV of cash inflows $570,000 $394,000 $816,000 $406,000 Payback period (years) 3.6 3.2 4.0 20 NPV of project $130,000 $192,000 $266,000 $100,000 Calculate the profitability index for Project A. (Round your answer to two decimal places.) 1.09 1.67 0.85 1.30

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