Accounting The following information is available for a potential investment for Panda Company.Initial investment$95,000Net annual cash inflow 20,000Net present value36,224Salvage value10,00010 yrs.Useful lifeThe potential investment's profitability index is:a. 4.75.b. 3.22.C. 2.62.d. 1.38.

Step 1: Define Profitability IndexIt is a metric that is helpful in significant business decisions…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following information is available for a potential investment for Panda Company: Initial investment $105000 Net annual cash inflow 20000 Net present value 42150 Salvage value 10000 Useful life 10 yrs. The potential investment’s profitability index is A. 2.49. B. 3.44. C. 5.25. D. 1.40.
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The following information is available for a potential investment for Panda Company: $110000 Initial investment Net annual cash inflow Net present value Salvage value Useful life 20000 O 5.50. O 2.49. O 3.55. O 1.40. 44150 10000 10 years The potential investment's profitability index is
Information on four investment proposals is given below:Investment ProposalA B C DInvestment required ........................ $(90,000) $(100,000) $(70,000) $(120,000)Present value of cash inflows ......... 126,000 138,000 105,000 160,000Net present value ............................ $ 36,000 $ 38,000 $ 35,000 $ 40,000Life of the project ............................ 5 years 7 years 6 years 6 yearsRequired:1. Compute the project profitability index for each investment proposal.2. Rank the proposals in terms of preference.
Calculate the internal rates of return of the following investment: Net investment -$1,100 Year 0 Net cash flows +6,500 Year 1 -11,400 Year 2 +6,000 Year 3 Round your answers to the nearest whole number and enter them in ascending order. IRR1: 0% IRR2: % IRR3: %
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Mountain Brook Company is considering two investment opportunities whose cash flows are provided below: Investment A Investment B Year Year 0 ($15,000) ($9,000) Year 1 5,000 5,000 Year 2 5,000 4,000 Year 3 5,000 3,000 Year 4 4,000 1,000 The company's hurdle rate is 12%. What is the present value index of Investment A? A. 0.97 B. 1.00 C. 1.01 D. 1.12
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For the investment shown in the following table, calculate the rate of return earned over the unspecified time period. Cash flow during period Beginning-of- period value End-of- period value $370 $42,400 $36,500 The rate of return on the investment is enter your response here%
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The following information is available for a potential investment for Panda Company. Initial investment $95,000 Net annual cash inflow 20,000 Net present value 36,224 Salvage value 10,000 10 yrs. Useful life The potential investment's profitability index is: a. 4.75. b. 3.22. C. 2.62. d. 1.38.