The following information is provided by Doppler Systems: Project A Project B Project C Project D Initial investment $440,000 $202,000 $550,000 $506,000 PV of cash inflows $570,000 $394,000 $816,000 $406,000 Payback period (years) 3.6 3.2 4.0 20 NPV of project $130,000 $192,000 $266,000 $100,000 Calculate the profitability index for Project A. (Round your answer to two decimal places 1.09 1.67 0.85 1.30

The following information is provided by Doppler Systems: Project A Project B Project C Project D Initial investment $440,000 $202,000 $550,000 $506,000 PV of cash inflows $570,000 $394,000 $816,000 $406,000 Payback period (years) 3.6 3.2 4.0 20 NPV of project $130,000 $192,000 $266,000 $100,000 Calculate the profitability index for Project A. (Round your answer to two decimal places 1.09 1.67 0.85 1.30

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

See similar textbooks

Similar questions

Time, Co. has a project available with the following cash flows: Cash Flow -$ 31,190 13,170 14,740 Year 0 1 2 3 4 21,060 12,200 If the required return for the project is 9.9 percent, what is the project's NPV? Multiple Choice $19,687.63 $15,791.12 $8,863.54 $17,226.67
Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Investment Present Value of Cash Life of the Project Internal Rate Project Required A $ 200,000 Inflows $294,323 (years) of Return 7 16% B $ 137,000 $ 267,000 с $ 104,000 $225,035 D $ 167,000 $ 303,136 12 7 3 21% 20% 19% The net present values should be computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the profitability index for each project. Note: Round your answers to 2 decimal places. Project Profitability Index A B C D In order of preference,…
me IRR-Mutually exclusive projects Bell Manufacturing is attempting to choose the better of two mutually exclusive projects for expanding the firm's warehouse capacity. The relevant cash flows for the projects are shown in the following table: . The firm's cost of capital is 15%. Options a. Calculate the IRR for each of the projects. Assess the acceptability of each project on the basis of the IRRS. b. Which project is preferred? a. The internal rate of return (IRR) of project X is %. (Round to two decimal places.) Is project X acceptable on the basis of IRR? (Select the best answer below.) No O Yes The internal rate of return (IRR) of project Y is %. (Round to two decimal places.) Is project Y acceptable on the basis of IRR? (Select the best answer below.) O Yes Click to select your answer(s). O Type here to search
Pls show steps correctly and all parts or skip thanks
Subject: acounting
nformation on four investment proposals is given below: Investment Proposal A B C D Investment required $ (900,000) $ (170,000) $ (90,000) $ (1,430,000) Present value of cash inflows 1,263,600 233,400 136,500 1,908,300 Net present value $ 363,600 $ 63,400 $ 46,500 $ 478,300 Life of the project 5 years 7 years 6 years 6 years Required: 1. Compute the profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference.
None
The management of Riker Inc. is exploring five different investment opportunities. Information on the five projects under study follow Project Number Investment required Present value of cash inflows at a 10% discount rate Net present value Life of the project Project 1 2 3 4 5 Profitability Index 1 2 3 $(390,000) $(330,000) $(350,000) 478,490 396,950 $ 88,490 $ 66,950 6 years 3 years First preference Second preference 433,190 $ (83,190) 5 years The company's required rate of return is 10%; thus, a 10% discount rate has been used in the preceding present value computations. Limited funds are available for investment, and so the company cannot accept all of the available projects. Third preference Fourth preference Fifth preference 4 $(330,000) Required: 1. Compute the profitability Index for each investment project. (Round your answers to 2 decimal places.) 300, 100 $ 29,900 12 years 5 $(480,000) 562,860 $82,860 6 years 2. Rank the five projects according to preference, in terms of (a)…
# 28 Wau Sdn. Bhd, is evaluating two (2) mutually exclusive projects. The cash flows are as follows Year Year 2 4 5 Project AA (500,000) 50,000 150,000 250,000 200,000 100,000 Project BB (600,000) 200,000 200,000 200,000 200,000 200,000 How long does it take to recover the initial cost of investment for each project? Answer O Project AA = 3 years & Project BB 3.25 years %3D Project AA = 2.5 years & Project BB = 3 years %3D %3D 3.
Agape Mining Inc. is evaluating a project with the following cash flows: Year 0 1 2 3 4 5 6 7 8 Cashflow -$380,000,000.00 $79,000,000.00 $82,000,000.00 -$53,000,000.00 $175,000,000.00 $195,000,000.00 -$40,000,000.00 $188,000,000.00 $71,000,000.00 Construct a spreadsheet and calculate the following (the required rate of return is 11%): o Payback period o Discounted payback period o Internal rate of return (IRR) Modified IRR o . The discounting approach The reinvestment approach The combination approach o Net present value (NPV) Based on your analysis, should the company take the project? Why?
As the project manager, you have been asked by AstraZeneca to assess the viability of two (2) sub-projects based on their net present value (NPV). Project 1 has an initial investment of $50,000 and a net cash inflow of $27,000 for a period of2 years.Project 2 has an initial investment of $150,000 and a net cash inflow of $59,000 in year 1and $120,000 in year 2.The discount rate to be used is 5% base on the information which project should be selected and why?
Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Life of the Present Project Net Internal Investment Rate Value $576,770 $755,000 ș308,594 $720,000 $442,949 $920,000 $145,122 Project Required (years) of Return 9 A $870,000 25% в 14 178 9 248 D 168 The net present values above have been computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the project profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, project profitability index and internal rate of return. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the project profitability index for each project. (Round your answers to 2 decimal places.) Project Profitability Project Index A В D

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS