The investment timing decision is aimed at analyzingwhether the00:30:40eBookMutune Choicecash flowsoccur at the beginning or end of a year.payback periodor NPV analysis should be used.project is a borrowingor lending project Investment should occur now or atsome future point.
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The investment timing decision is aimed at analyzingwhether the00:30:40eBookMutune Choicecash flowsoccur at the beginning or end of a year.payback periodor NPV analysis should be used.project is a borrowingor lending project Investment should occur now or atsome future point.
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- AlpeshConsider the two mutually exclusive projects described in the table below. the question requires a step by step excel solutionFor any positive value of the MARR, divide the possible MARR values into ranges with different decisions;describe and discuss what decision would be made in each range and why. You will need to calculate the crossover rate to determine the precise MARR where the decision changes. Include an NPV profile table and chart to illustrate your answer.Year Cash Flow Project A Cash Flow Project B0 -450,000 -700,0001 200,000 200,0002 150,000 200,0003 100,000 200,0004 100,000 200,0005 75,000 200,000A large decision tree has an outcome branch detailed below. If decisions D1, D2, and D3 are all options in a 1-year time-period, find the decision path that maximizes the outcome value. There are specific dollar investments necessary for decision nodes D1, D2 and D3,a s indicated on each branch D2 Investment $-50 D1 $-80 $-25 $-30 $-35 0.9 0.1 0.3 0.3 0.4 0.5 0.5 D3 Value, $ 150 -30 75 200 -100 50 0.4 0.6 Value, $ 30 100 -50 500 90
- I need this question completed in 10 minutesYou are considering an investment project with the cash flows of -300 (the initial cash flow), 800 (cash flow at year 1), -200 (cash flow at year 2). Given the discount rate of 10%, compute the Modified Internal Rate of Return (MIRR) using the discountingapproach. 19.72% 71.94% 37.52% 50.55%es Lopez Company is considering three alternative investment projects below: Project 1 5.2 years $ 26,700 Project 2 5.7 Years $ 33,700 14.2% 13.1% Payback period Net present value Internal rate of return a. Payback period b. Net present value c. Internal rate of return. Which project is preferred if management makes its decision based on (a) payback period, (b) net present value, and (c) internal rate of return? Preferred Investment Project 3 4.9 Years Reason $19,700 12.5%
- Time value of money question: Envision you are approached with an investment opportunity. You aregiven two alternatives to choose from. Investment A has a higher interest rate than Investment B.Investment A requires a greater number of periods until you receive the benefit than Investment B. Applying concepts from the PV = FV/(1+r)^n (the NPV formula and discounting) describe the process ofhow you would decide which investment option would be better to invest in. Discussing how changes inboth the interest rate and the number of periods would affect this decision will help.Use the information provided to answer the questions.5.1 Use the information provided below to calculate the following. Where applicable, use the presentvalue tables provided in APPENDICES 1 and 2 that appear after QUESTION 5.5.1.1 Calculate the Payback Period of Project A (expressed in years, months and days). 5.1.2Calculate the Accounting Rate of Return (on average investment) of Project B (expressed to twodecimal places). 5.1.3 Calculate the Net Present Value of each project (with amounts rounded off to the nearest Rand). 5.1.4 Use your answers from question 5.1.3 to recommend the project that should be chosen. Motivateyour choice.You have been given the expected return data shown in the first table on three assets—F, G, and H—over the period 2018-2021 Year Asset F Asset G Asset H 2019 5 12 12 2020 10 9 7 2021 13 21 4 2022 6.5 6 10.5 Using these assets, you have isolated the three investment alternatives shown in the following table. Alternative Investment 1 100% of asset G 2 40% of asset F and 60% of asset G 3 50% of asset F and 50% of asset H Calculate the expected return over the 4-year period for each of the three alternative Calculate the standard deviation of returns over the 4-year period for each of the three alternatives. Use your findings in parts a and b to calculate the coefficient of variation for each of the three alternatives. On the basis of your findings, which of the three investment alternatives do you recommend? Why?
- Payback period. Given the cash flow of two projects-A and B-in the following table, and using the payback period decision model, which project(s) do you accept and which proje period for recapturing the initial cash outflow? For payback period calp What is the payback period for project A? 6 Data Table - X years (Round to one decimal place.) (Click on the following icon D in order to copy its contents into a spreadsheet.) Cash Flow B. Cost Cash flow year 1 Cash flow year 2 Cash flow year 3 Cash flow year 4 Cash flow year 5 Cash flow $12,000 $6,000 $6,000 $6,000 $100,000 $20,000 $10,000 $40,000 $6,000 $30,000 SO $6,000 $6,000 year 6. SO Print DoneUsing image: a-1. What is the payback period for each project a-2. If you apply the payback criterion, which investment will you choose? b-1. What is the discounted payback period for each project? b-2. If you apply the discounted payback criterion, which investment will you choose? c-1. What is the NPV for each project? c-2. If you apply the NPV criterion, which investment will you choose? d-1. What is the IRR for each project? d-2. If you apply the IRR criterion, which investment will you choose? e-1. What is the profitability index for each project? e-2. If you apply the profitability index criterion, which investment will you choose? f. Based on your answers in (a) through (e), which project will you finally choose?You are given the following cash flow information for a project. Given this information, and assuming that the correct risk-adjusted discount rate (WACC) to use is 14 percent, while the firm's true reinvestment rate is 23 percent, determine the modified net present value (MNPV) for this project. Year 0 1 2 3 4 5 O $20,408 O $22,162 O $21.277 $21,728 O$20,883 Cash Flow -$20,000.00 $16,000.00 $10,000.00 $15,000.00 $16,000.00 $17,000.00