The expected average rate of return for a proposed investment of $786,000 in a fixed asset, with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total net income of $282,000 for the 4 years, is (round to two decimal points). a.35.88% b.8.97% c.13.90% d.17.94%

Q: BLEM: An investment is be made with an intial capital of PHP 933839. It is expected that there will…

A: The payback period is amount of time in years taken to recover the initial investment of the…

Q: Assuming a cost of capital of 5% and that $60,000 is the correct profit estimate each year for the…

A: Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or…

Q: The spot price of an investment asset is $50. The asset pays sure income of $5 in 6 months and the…

A: Using the Formula (stock price less present value of dividend ) * (1+rate)^no. of period

Q: Average Rate of Return The following data are accumulated by Watershed Inc. in evaluating two…

A: Average investment :— It is calculated by dividing sum of initial investment and residual value by…

Q: Part II - Average Rate of Return (Ch 26) The management of River Corporation is considering the…

A: concept. average rate of return can be calculated in two ways:- 1. on basis of initial investment.…

Q: The following investment has a net present value of zero at i-8% per year. Which of the following is…

A: The formula for computing Net equivalent annual worth = NPV/Annuity (t,r).

Q: None

A: Step 1: Definition of Intrinsic Value:In asset pricing, the intrinsic value of an asset is the worth…

Q: The expected average rate of return for a proposed investment of $639,000 in a fixed asset, with a…

A: b. 52.43%

Q: The expected average rate of return for a proposed investment of $5,550,000 in a fixed asset, using…

A: The expected average rate of return is the percentage measure of annual return earned on the…

Q: A $12,000 investment will return annual benefit for six yearswith no salvage value at the end of six…

A: Investment = $12000Tax rate = 46%Inflation rate = 5%Tenure =6 yearsdepreciation = SLMAnnual benefits…

Q: Average rate of return The following data are accumulated by Patterson Inc. in evaluating two…

A: AVERAGE RATE OF RETURN The average rate of return refers to the average amount of profit that is…

Q: А C Capital investment $ 2,000 7,000 4,200 Annual revenues 3,200 8,000 6,000 Annual costs 2,100…

A: Incremental analysis determine the true cost differences between the two alternatives.

Q: An anticipated purchase of equipment for $520,000, with a useful life of 8 years and no residual…

A: The payback period is the time period taken by business to cover the initial or original cash…

Q: Average Rate of Return The following data are accumulated by Watershed Inc. in evaluating two…

A:

Q: Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$…

A:

Q: The business units of contractor companies carry out investment expenditures for a capital of…

A: Capital budgeting is the process of decision making used to evaluate the profitability of the…

Q: Compute the net present value of each potential investment. Use 7 years for Project 1 and 5 years…

A: NPV is the difference between the present value of cash inflows and the present value of cash…

Q: 22) Consider a position of 2,000,000 investment in asset X and 3,000,000 in Investment Y. Daily…

A: One day standard deviation of asset X (sX) = 2,000,000 * 0.1% = 2,000.One day standard deviation of…

Q: An investor has $10,000 invested in asset (X). His advisor recommend a new asset ( Y) for investment…

A: To determine whether the investor should follow the advisor's recommendation to invest in asset Y,…

Q: Which alternative in the table below should be selected when the MARR = 7% per year? The life of…

A: Internal rate of return is the discount rate at which the present value of the future cash flow and…

Q: What is the present worth of a project with an initial investment of $8,000 and a net annual income…

A: Present Value Present value is the present worth of any sum of a money to be received in the future…

Q: Below are two potential investment alternatives:   Initial capital investment…

A: Net Present Value(NPV) refers to one of the concepts from the modern techniques of capital budgeting…

Q: Question: of A proposed new investment has projected sales $842,000. Variable costs are 57 percent…

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Q: Average Rate of Return The following data are accumulated by Watershed Inc. in evaluating two…

A: It is also known with the name of the accounting rate of return. We can evaluate by dividing net…

Q: Which of the two alternatives based on future worth method of comparison should be selected?…

A: Future worth method computes the future value of the project or alternative available. Future worth…

Q: 22: Find out the capitalized cost of a certain investment based on the following: 1. An initial…

A: Solution- (1)-Initial deposit=100,000(2)Payment every 6 years starting from year 1=10,000 Present…

Q: REQUIRED Use the information provided below to calculate the following: 3.1 Payback Period of…

A: Pay back Period  = Initial Cost / Annual Cashflow  Accounting Rate of Return  = Average Net Income /…

Q: er question B.

A: The given problem can be computed using VAR and STDEV formula in excel.

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A: Payback period = Investment/estimated annual net cash inflows for n years.

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A: Annual net cash flow from project$2,600Present value of an ordinary annuity of $1 at 10% for 4…

Q: 2. Compare the following alternatives, using (i) the Net Present Value method. The MARR is 13.32%…

A: Here we will use the capital budgeting tool of NPV (net present value). The tool of NPV is based on…

Q: The expected average rate of return for a proposed investment of $632,200 in a fixed asset with a…

A: AVERAGE RATE OF RETURNAverage Rate of Return is one of the Important Capital…

Q: Question 1 Data for two alternatives are as follows: A B INVESTMENT 35,000 50,000 ANNUAL BENEFITS…

A: IRR: In capital budgeting, the internal rate of return, or IRR, is a metric that is used to assess…

Q: 13) What is the value of a property assuming a yield rate of 15%, terminal capitalization rate of…

A: Data given: NOI=$350,000 Growth=3% p.a. Yield=15%  Terminal capitalization rate=11%  N=5 year…

Q: 3. Draw the NPV profile for an asset with an initial cost of $100,000 and an expected operating cash…

A: NPV stands for net present value. NPV profile is a graph that shows the discount rate on the x axis…

Q: Give typed solution only What is the internal rate of return of a project costing $3,000; having…

A: The process through which any investment/project's feasibility and profitability are tested is…

Q: A project has estimated annual net cash flows of $30,500. It is estimated to cost $115,900.…

A: Payback period is the period required to recover initial investment of the project that is being…

Q: A project has estimated annual cash flows of $95,000 for 4 years and is estimated to cost $260,000.…

A: NPV helps in investment analysis and capital budgeting. By comparing different investment options…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.