The cash flow streams for three alternative investment A, B, C and D are: Project Co 230000 Cash Flow (Tk.) C2 C3 C4 Cs C6 50000 A 55000 45000 65000 45000 75000 В 290000 45000 90000 35000 95000 65000 55000 310000 75000 55000 60000 55000 65000 45000 D 350000 77000 75000 95000 85000 65000 Determine (i) Pay Back Period, (ii) NPV if the required rate of return is 11%, and (ii) IRR for the four alternatives.
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- Consider two investments with the following sequences of cash flows: (a) Compute the IRR for each investment.(b) At MARR = 10%, determine the acceptability of each project.(c) If A and B are mutually exclusive projects, which project would you selecton the basis of the rate of return on incremental investment?Consider the cash flows for the following investment projects: (a) For Project A. find the value of X that makes the equivalent annual receiptsequal the equivalent annual disbursement at i = 13%.(b) Would you accept Project Bat i = 15% based on the AE criterion?Which of the following comes closest to the net present value (NPV) of a project whose initial investment is $5 and which produces two cash flows: the first at the end of year 2 of $3 and the second at the end of year 4 of $7? The required rate of return is 13%? Select one: a. $1.84 b. $0 c. $1.64 d. $2.05 e. $2.26
- If the cash flows for Project M are C0 = -1,000; C1 = +800; C2 = +700 and C3= -200. Calculate the IRR for the project. For what range of discount rates does the project have a positive NPV?Project Y has following cash flows: C0 = -800, C1 = +6,000, and C2 = -6,000. Calculate the IRRs for the project: For what range of discount rates does the project have positive NPV (Plot a graph with NPV on the vertical axis and discount rate on the horizontal axis).Use the table for the question(s) below. Consider the following two projects: Project Year 0 Cash Flow Year 1 Cash Flow Year 2 Cash Flow Year 3 Cash Flow Year 4 Cash Flow Discount Rate A -100 40 50 60 N/A .15 B -85 30 30 20 40 10% 11) The NPV of project B is closest to:
- Consider two investments with the following sequences of cash flows: (a) Compute the IRR for each investment.(b) At MARR = 15%. determine the accepta bility of each project.(c) If A and B are mutually exclusive projects. which project would you selecton the basis of the rate of return on incremental investment?Given the following cash flows for project A: C0 = -1000, C1 = +600 ,C2 = +400, and C3 = +1500, calculate the payback period)7.16)Consider the investment projects given in Table P7.16. Assume that MARR = 12% in the following questions. (a) Compute i* for each investment. If the problem has more than one i*, identify all of them. (b) Compute IRR(true) for each project. (c) Compute the MIRR at MARR = 12%. (d) Determine the acceptability of each investment. TABLE P7.16 Net Cash Flow Project 1 Project 2 Project 3 -$1,000 -$1,000 -$1,000 1 2,500 1,960 1,400 2 -840 950 -200
- A project has the following cash flows set out below. What is the profitability index of this project if the relevant discount rate is 2 percent? Enter your final answer to two decimal places. Year Cash flow 0 -1,745 1 537 2 2,066 3 3,912Consider the cash flows for the investment projects given in Table. Assume that the MARR = 10%. (a) Suppose A, B, and C are mutually exclusive projects. Which project would be selected on the basis of the IRR criterion (b) Assume that projects C and È are mutually exclusive. Using the IRR criterion, which Project would you select? Net Cash Flow A В C D E -4,250 3,200 2,850 -4,250 1,500 3,250 1,600 1,200 -4,250 2,850 -4,850 2,100 2,100 2,100 2,100 2,500 1 -835 2,900 1,050 500 2 -835 3 800 -835 4 300 -835Consider the following two sets of project cash flows: Project Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Discount rate X -830 145 158 193 253 288 290 0.123 Y -510 193 193 91 81 88 90 0.123 A) Assume that projects X and Y are mutually exclusive. The correct investment decision and the best rational for that decision is to: i) invest in Project Y since IRRY > IRRX. ii) invest in Project Y since NPVY > NPVX. iii) neither of the above. B) What are the incremental IRR and NPV of Project X? C) Is the use of the incremental measures in B) appropriate to your evaluation of the preferred project? Explain. D) Which is the preferred project? Explain and justify the basis for your choice