please answer in text with introduction , concept ,explanation , computation , steps for each part and steps clearly and completely no AI no copy paste The following table contains information about four potential investment projects thatCastle Corporation is considering.ProjectRequiredInvestmentProject LifeABCDA$640,000$890,000$1,140,000$1,640,000Required:ARRPaybackPeriodNPVProfitability Index544519.50%3.917.75%3.5$ 203,250$193,0622.881.2210.75%3.2$ 216,6701.35512.45%3.8$ 246,0081.301. Rank the four projects in order of preference under each method indicated by theheaders:2. Which method is the best for evaluating the investments?Complete this question by entering your answers in the tabs below.Required 1 Required 2Rank the four projects in order of preference under each method indicated by theheaders:AccountingRate of ReturnPaybackPeriodNet PresentValueProfitabilityIndex1st preferred2nd preferred3rd preferred4th preferred

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EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter11: The Cost Of Capital

Section: Chapter Questions

Problem 19PROB

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The following table contains information about four potential investment projects that Castle Corporation is considering. Required Investment $640,000 Payback Project A Project Life ARR Period 5 19.50% 3.9 B $ 890,000 4 17.75% 3.5 с $ 1,140,000 4 10.75% 3.2 NPV $203,250 $193,062 $ 216,670 Profitability Index 2.88 1.22 1.35 D $ 1,640,000 5 12.45% 3.8 $ 246,008 1.30 Required: 1. Rank the four projects in order of preference under each method indicated by the headers: 2. Which method is the best for evaluating the investments? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Rank the four projects in order of preference under each method indicated by the headers: 1st preferred 2nd preferred 3rd preferred 4th preferred Accounting Rate of Return Payback Period Net Present Value Profitability Index
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6 Lewis Services is evaluating six investment opportunities (projects). The following table reflects each project’s net present value NPV and the respective initial investments required. All of these projects are independent.Project NPV InvestmentI 2,500 2,500II 4,000 20,000III 7,500 30,000IV 8,000 40,000V 2,000 10,000VI 2,500 5,000Lewis has an investment constraint of P50,000. Which combination of projects would represent the optimal investment that should be recommended to Lewis Services’ management? Group of answer choices II, IV and III IV only I, IV and VI I, II, III, V, and VI I, III and IV I, II, III, IV, V, and VI I, III, and VI I, III, V, and VI
Calculate the profitability index for the below projects and indicate your order of choices. Project Present Value Investment A $145,000 $95,000 $135,000 $80,000 $175,000 $110,000 Select one: a. B, A and C b. A, C and B c. B, C and A d. C, B and A B с
Net Present Value Method, Present Value Index, and Analysis First United Bank Inc. is evaluating three capital investment projects using the net present value method. Relevant data related to the projects are summarized as follows: BranchOfficeExpansion ComputerSystemUpgrade ATMKioskExpansion Amount to be invested $787,317 $584,976 $298,035 Annual net cash flows: Year 1 391,000 278,000 164,000 Year 2 364,000 250,000 113,000 Year 3 332,000 222,000 82,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Required: 1. Assuming that the desired rate of return is 10%,…
solve a and b given in the image provided.
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Based on the parameters calculated, should this project goes ahead? Give your reasons for your answer. Economic Parameters Base case Project IRR Equity IRR NPV($millions)@12% Capital Expenditure($million) PayBack period (Year) WACC (Based on 75/25) 13.68 15.89 9,172,880 (85,000,000) 8.92 0.1246
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Consider the following investment project: n An I0 -$8,500 9%1 $4,400 12%2 $4,400 10%3 $1,500 13%4 $3,500 12%5 $4,300 10%Suppose, as shown in the preceding table, that the company's reinvestment opportunities (that is, its MARR) change over the life of the project. For example, the company can invest funds available now at 9% for the first year, 12% for the second year, and so forth. Calculate the net present worth of this investment, and determine its acceptability.
Q5. Consider the investment projects given in the following table: Net Cash Flow n Project A Project B Project C - $100 - S150 - $10 1 30 50 410 2 50 50 -558 3 50 252 4 50 21.11% Assume that MARR = 12% in the following questions: IRR 23.24% 20%, 40%, 50% Identify simple and non-simple projects. Identify pure and mixed investments. Determine the IRR for Project C. (Hint: You can use trial-error method followed by linear interpolation.) Which project(s) is(are) acceptable? b) c) d)
Rocky Red Ltd has provided the following figures for two investment projects, only one of which may be chosen. Rocky Red Ltd has provided the following figures for two investment projects, only one of which may be chosen. Project Alpha Project Beta Initial outlay £200,000 £180,000 Profit for the year 1 £80,000 £10,000 2 £60,000 £10,000 3 £40,000 £30,000 4 £30,000 £25,000 Estimated value at the end of year 4 £10,000 £5,000 Profit is calculated after deducting straight line depreciation. The business has a cost of capital of 15%.…

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