The cash flows of two alternatives are given below. Determine the no-returnpayback period for both alternative A and alternative B, respectively.AlternativesAВFirst cost, $20,00026,000NCF, $ per year2,000 (year 1-3)3,500 (year 4-10)2,500 (year 1-4)4,000 (year 5-10)S, $1,5002000Life, year10106 years for both alternatives6.years for Alt A and 8 years for Alt B7 years for Alt A and 8 years for Alt B8 years for Alt A and 7 years for Alt B

The cash flows of two alternatives are given below. Determine the no-return payback period for both alternative A and alternative B, respectively. Alternatives А В First cost, $ 20,000 26,000 2,000 (year 1-3) 3,500 (year 4-10) 2,500 (year 1-4) 4,000 (year 5-10) NCF, $ per year S, $ 1,500 2000 Life, year 10 10 6 years for both alternatives 6 years for Alt A and 8 years for Alt B 7 years for Alt A and 8 years for Alt B 8 years for Alt A and 7 years for Alt B

The cash flows of two alternatives are given below. Determine the no-return payback period for both alternative A and alternative B, respectively. Alternatives А В First cost, $ 20,000 26,000 2,000 (year 1-3) 3,500 (year 4-10) 2,500 (year 1-4) 4,000 (year 5-10) NCF, $ per year S, $ 1,500 2000 Life, year 10 10 6 years for both alternatives 6 years for Alt A and 8 years for Alt B 7 years for Alt A and 8 years for Alt B 8 years for Alt A and 7 years for Alt B

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 the following cash flows: Year Cash Flows 0 -$ 10,900 1 3 4 1234 4,630 6,640 4,160 -1,800 Assuming the appropriate interest rate is 7 percent, what is the MIRR for this project using the discounting approach? Multiple Choice 9.94% 14.08% 12.55% 8.29% 10.76%
The cash flow estimates of a project are shown in the table below, and the MARR is 6% per year. Of the following three relations, the correct one to calculate the annual worth of this project is: Cash Flow First cost, S Annual cost, S per year Revenue, S per year Salvage value, S Life, years -200 -50 120 25 10 Relation 1: AW=-200(A/P,6%,10)+70+25(A/F,6%,10) Relation 2: AW=[-200-50(P/A,6%,10)+120(P/A,6%,10)+25(P/F,6%,10)|(A/P,6%,10) Relation 3: AW=-200(F/P,6%,10)+25+(-50+120)(A/P,6%,10) O Relation 1 and 3 OARelation 1 and 2 O Only Relation 1 O Only Relation 3
BECL Ltd is considering a project, which will involve the following cash inflows and (out)flows: $000 Initial Outlay (400) After 1 year 40 After 2 years 300 After 3 years 300 What will be the NPV (net present value) of this project if a discount rate of 15% is used? a. -$60.8k b. $460.8k c. $240k d. $60.8k
Please provide the Payback period and Discounted Payback Period:
Payback period. Given the cash flow of two projects—A and B—and using the payback period decision model, which project(s) do you accept and which project(s) do you reject if you have a three-year cutoff period for recapturing the initial cash outflow? For payback period calculations, assume that the cash flow is equally distributed over the year. Cash Flow A B Cost $14,000 $110,000 Cash flow year 1 $5,600 $44,000 Cash flow year 2 $5,600 $33,000 Cash flow year 3 $5,600 $22,000 Cash flow year 4 $5,600 $11,000 Cash flow year 5 $5,600 $0 Cash flow year 6 $5,600 $0
A new project will have an intial cost of $10,000. Cash flows from the project are expected to be $3,000, $3,500, and $4,000 over the next 3 years, respectively. Assuming a discount rate of 8%, what is the project's discounted payback period? Question 4 options: 2.23 2.89 2.75 2.10 It does not pay back on a discounted basis
For the following stream of free cash flows, calculate the payback period and indicate whether you would invest in the project with a four year maximum allowable payback period. Year Free Cash Flows 0 -45,452 3.8 years; Invest 3.8 years; Do not invest 4.8 years; Invest 4.8 years; Do not invest 1 10,005 2 14,921 3 12,537 4 10,452 5 21,455
Find the Payback Period for Oman Packaging company if the initial investment is 15000 OMR and the cash Inflows are as follows: Year 1 =5250 OMR; Year 2 =5500 OMR; Year 3=5750 OMR and Year 4=5200 OMR. Select one: a. 2 years 8 months b. 2 years c. 3 years 2 months d. None of the options e. 3 years
The cash flows in year-1, year-2, year-3, and year-0 are $4,000, $3,000, $5,000, and - $8,000. Compute the discounted payback period if the required rate of return is 10%. Between 2-3 years 2.50-years 2.20-years None of the above а. b. с. d.
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 8 percent and the maximum allowable discounted payback period is three years. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project C Time: 0 1 2 3 4 5 Cash flow: –$1,000 $480 $480 $520 $300 $100
Consider the following cash flows of two mutually exclusive projects for AZ-Motorcars. Assume the discount rate for both projects is 12 percent. Year AZM Mini-SUV AZF Full-SUV -$ 550,000 340,000 220,000 170,000 0123 a. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) AZM Mini-SUV AZF Full-SUV -$ 900,000 370,000 460,000 310,000 AZM Mini-SUV AZF Full-SUV years years b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Annual cash inflows that will arise from two competing investment projects are given below: Year Investment A Investment B 1 $7,000 $ 10,000 2 8,000 3 9,000 4 10,000 $ 34,000 9,000 8,000 7,000 $ 34,000 The discount rate is 7%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: Compute the present value of the cash inflows for each investment.

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