The following table contains the estimated cash flows of a project. Assume the appropriate discount rate (hurdle rate) is 14%.  Year       Operating Cash Flow  0             -$20,000  1              $7,000   2              $8,000  3              $9,000  4              $4,000   a. What is the payback period of project 1?

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A: Profitability Index is computed as follows:-Profitability Index =

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A: The graph of the NPV versus the required rate of return for the project is shown below-

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Q: At what discount rate does the following project have a positive NPV of exactly $1,000?

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A: YearCash Flows0($20,000)1$8,0002$10,0003$4,0004$5,000Required:Internal Rate of Return=?

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A: profitability index is a capital budgeting technique used for making investment decisions.It is…

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A: Year Cash flow 0 -18700 1 9400 2 10400 3 6500

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A: Internal rate of return (IRR) is the discount rate of a project which makes its NPV=0. It is a…

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A: Capital budgeting is a financial technique to evaluate a project's liquidity and profitability…

Q: A cash flow sequence has a receipt of $20,000 today, followed by a disbursement of $17,000 at the…

A: Let us first understand the cash flow pattern. Time        cashflows 0                 20000 1…

Q: Use the table for the question(s) below. Consider the following two projects with cash flows in $:…

A: The incremental IRR analysis refers to the method of comparing two competing investments. It is…

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A: Cash flow of project B.Year 0-$73Year 1$30Year 2$30Year 3$30Year 4$30

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A: Discounted Payback(PB) Period shows the time period in which present values(PV) of all cash inflows…

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A:

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Q: Doak Corp. is evaluating a project with the following cash flows: Year           Cash Flow 0…

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A: Given,  Cashflows of Project A Cashflows of project B

Q: Consider a project with the cash flow as depicted in Table 1: The discount rate for this project is…

A: Formulas:

Q: a. Compute the project's NPV if cash flows occur at the ends of the respective years b. Compute the…

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Q: A firm evaluates all of its projects by using the NPV decision rule. Year Cash Flow 0 -$31,000 1…

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Q: Discounted payback period. Given the following two projects and their cash​ flows, calculate the…

A: Payback period is defined as the time required to recover the capital investment in a project.

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A: NPV is the sum of present value of future cashflows PV = cashflow/(1+rate)^year

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.