Suppose you were considering purchasing a $6300 machine today that would generate additional net profit of $2500 booked at the end of each year. Assuming you need a 10 percent annual return to justify the investment, would the investment be worth doing if you had only three years of payouts? Would your answer change if you only needed a 9 percent annual return on your investment ? Why or why not? You must use present value to demonstrate your answer, and show your work

Q: You are offered a chance to buy an asset for $4,000 that is expected to produce cash flows of $750…

A: The internal rate of return (IRR) is a financial metric used to estimate the potential profitability…

Q: You are making an intial investment of $111,061 and require a rate of retum of 12 percent. You…

A: Net present value = Present value of cashflows - Initial investment

Q: 12. Suppose Hunter Valley is deciding whether to purchase new accounting software. The payback for…

A: The payback period denotes the duration it takes for an investment to recover its initial…

Q: ist 2 You are considering opening a new plant. The pland will cost $95.1 milion up front and will…

A: Net present value and internal rate of return are capital budgeting techniques used to evaluate…

Q: 4. Machine A costs $800, requires annual maintenance of $150, and will last for 10 years. Machine B…

A: Present worth refers to the current date value of the future cash flows including the initial…

Q: You have been offered a unique investment opportunity. If you invest, $10400 ?today, you will…

A: NPV is also known as Net Present Value. It is a capital budgeting technique which helps in decision…

Q: Assume that you are 20 years old now and have $1000 in hand to invest in one business project, and…

A: Future value of money refers to the expected value of a sum of money at a future date, considering…

Q: A project that provides annual cash flows of $17,300 for nine years costs $78,000 today. 1. Is this…

A: Capital budgeting refers to a technique used for evaluating the viability of the project by…

Q: 21. An investor is considering the purchase of an office complex. Next year's NOI and cash flow is…

A: Net Present Value (NPV) in finance is a method used to evaluate the profitability of an investment…

Q: Consider a project with a 15 year time horizon (T=14). Suppose that in the first two years, the…

A: Time Period is 15 years(T=14) Project cost at t=0 is $175 and t=1 is $150 Net benefits at t=2 is $40…

Q: What is the approximate maximum amount that a firm should consider paying for a project that will…

A: Discounting and compounding are the two concepts used in the time value of money to determine the…

Q: Suppose you have a financial investment opportunity for which if you invest $2,000 today, you will…

A: Present value of deposited amount (PV) = $2,000Annual payments received (PMT)  = $100Lumpsum amount…

Q: Suppose you have an investment offer that guarantees an average investment gain of $1,000 per year.…

A: The average rate of change describes the rate at which one quantity changes in relation to another.…

Q: Should you take the $1,600,000 now, or wait to get the full $2,000,000 in 10 years? Why or why not?…

A: Future value of money is the amount of interest accumulated over the period of time of deposit and…

Q: What is the relationship between present value and future value?

A: Future Value : FV is that value which will be received in near future. Present Value : PV is that…

Q: 1. If a buyer wants a 10% return on investment and is interested in a retail complex that produces a…

A: Meaningit helps in understanding the profit which is earned over an investmentFormula Return on…

Q: Suppose you are considering a project has an initial cost of $500 that has an ongoing benefit of…

A: The objective of the question is to calculate the Net Present Value (NPV), the Benefit Cost Ratio…

Q: 4. Consider an iìnvestment of $100,000 that yields $20,000 after year 1, $30,000 after year 2,…

A: To calculate the payback period, we need to find the time that the project has recovered its initial…

Q: Now, drawing on your understanding of how to calculate present value of future  investment,…

A: interest rate = 12% cumulative present value factor for 10 years = 5.650 future value of investment…

Q: Suppose you are considering a project that will have an initial construction cost today and a final…

A: Computation of Present Value is as follows:

Q: 3.4 Amber was evaluating the feasibility of a project that has an initial investment of $205,000 and…

A: IRR is the rate an investor earns on his investment during his investment horizon. It is an…

Q: You have an opportunity to invest $100,000 now in return for $80,000 in one year and $30,000 in two…

A: Explanation :NPV is a Capital budgeting techniques. It is defined as the sum of the present values…

Q: What does the IRR rule say about whether the investment should be undertaken? What about the NPV…

A: Capital budgeting is a fundamental financial procedure in which organizations evaluate and select…

Q: 3. Replacing old equipment at an immediate cost of $120,000 and an additional outlay of $10,000 five…

A: Initial cost = $120,000 Additional cost in five years = $10,000 Annual saving = $24,000 Period = 9…

Q: Year Project Cash Flow (millions) $(210) 1 80 60 3 80 4. 95 (Click on the icon in order to copy its…

A: The question is based on the concept of capital budgeting technique to find the payback period for…

Q: Replacing old equipment at an immediate cost of $120,000 and an additional outlay of $15,000 six…

A: Initial cost = $120,000Additional cost in six years = $15,000Annual saving = $24,000Period = 9…

Q: Suppose you considering investing $34 to earn $4.8 every year for forever. If the annual interest…

A: The difference between the current value of cash inflows and outflow of cash over a period of time…

Q: You have an opportunity to invest $104,000 now in return for $79,800 in one year and $29,600 in two…

A: A discounted method called net present value (NPV) is used to assess the effectiveness of long-term…

Q: An investment offers the following: a series of $1000 annual payments, starting one year from now,…

A: To find the present value of the investment , we have to discount each of the 12 annual payments…

Q: You are deciding between two mutually exclusive investment opportunities. Both require the same…

A: Internal rate of return refers to the minimum return to be earned by the investment over an…

Q: Assume you invest $5,100 today in an investment that promises to return $6,928 in exactly 10 years.…

A: The IRR of an investment is used to measure the highest return for which the investment remains…

Q: Your company is considering a new project opportunity. It would immediately receive $220. In return,…

A: YearCash Flow (A)PV Factor @5% (B)Present value…