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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A: The payback period refers to the time it takes the project’s future cash flows to recover the…

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A: The payback period is used to calculate the time the project takes to recover its initial…

Q: Assuming a discount rate of 1%, what is the net present value (rounded to the nearest whole dollar)…

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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: Discounted payback period is the period within which accumulated discounted cash flow becomes equal…

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Q: A project will generate the following cash flows. The required rate of return is 15%. If the…

A: Profitability index: Profitability is computed by dividing the present value of cash inflow to…

Q: Find the IRR for the following project assuming a WACC of 10%.  Year Cash Flow 0 -20,000 1 8,000 2…

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: Equivalent annual worth is one of the capital budgeting techniques which is used to determine the…

Q: A project has the following cash flows: Year Cash Flow -$ 18,700 9,400 10,400 6,500 a. What is the…

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

Q: You are given the following decision tree representing the cash flows for a project (conditional…

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: 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…

Q: Given the cash flow of two projects, A and B: Cash Flow Year 0 Year 1 Year 2 Year 3 Year 4 Year 5…

A:

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

A: MIRR is also known as modified rate of return. It is a capital budgeting techniques which help in…

Q: Estimated cash inflows for project A are as follows , respectively ; $ 10.000 , 7.000…

A: Profitability index method does not consider lives of the project. Profitability index method…

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A: Formulas:

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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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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.