Utah Technology has a weighted-average cost of capital of 8.85 percent and is evaluating project B. Project B involves an initial investment of $71,700.00 and an expected cash flow of $116,400.00 in 5 years. Project B is considered less risky than an average-risk project at Utah Technology, such that the appropriate discount rate for it is 1.70 percentage points different than the discount rate used for an average-risk project at Utah Technology. The internal rate of return for project B is 10.18 percent. What is the NPV of project B? -$0.00 (plus or minus $10) $4,474.71 (plus or minus $10) $10,712.31 (plus or minus $10) -$1,204.85 (plus or minus $10) None of the above is within $10 of the correct answer

Jonczyk Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $461,000, has an expected useful life of 11 years and a salvage value of zero, and is expected to increase net annual cash flows by $72,000. Project B will cost $271,000, has an expected useful life of 11 years and a salvage value of zero, and is expected to increase net annual cash flows by $45,000. A discount rate of 8% is appropriate for both projects.  1. What is the net present value $ of project A? 2. what is the profitability index for project A?   3. What is the net present value $ of project B? 4. what is the profitability index for project B?

Walsh Company is considering three independent projects, each of which requires a $6 million investment. The estimated internal rate of return (IRR) and cost of capital for these projects are presented here: Project H (high risk): Cost of capital = 17% IRR = 19% Project M (medium risk): Cost of capital = 15% IRR = 13% Project L (low risk): Cost of capital = 7% IRR = 11% Note that the projects' costs of capital vary because the projects have different levels of risk. The company's optimal capital structure calls for 50% debt and 50% common equity, and it expects to have net income of $7,714,500. If Walsh establishes its dividends from the residual dividend model, what will be its payout ratio? Round your answer to two decimal places.

Blossom Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $454,000, has an expected useful life of 13 years and a salvage value of zero, and is expected to increase net annual cash flows by $68,000. Project B will cost $300,000, has an expected useful life of 13 years and a salvage value of zero, and is expected to increase net annual cash flows by $47,000. A discount rate of 9% is appropriate for both projects.

ABC Company has calculated the net present value of two investment opportunities but must decide which option to pursue: Project X: Present value of cash flows = $117,000 Investment = $100,000 Net present value = $17,000 Project Z: Present value of cash flows = $138,000 Investment = $120,000 Net present value = $18,000 Complete the following: Present value ratio of Project X =  Present value ratio of Project Z =  Decision = Invest in  (Project X/Project Z)

Walsh Company is considering three independent projects, each of which requires a $3 million investment. The estimated internal rate of return (IRR) and cost of capital for these projects are presented here: Project H (high risk): Cost of capital Project M (medium risk): Project L (low risk): Cost of capital Cost of capital = 15% = 11% = 8% IRR = 19% IRR = 12% IRR = 7% Note that the projects' costs of capital vary because the projects have different levels of risk. The company's optimal capital structure calls for 50% debt and 50% common equity, and it expects to have net income of $4,443,000. If Walsh establishes its dividends from the residual dividend model, what will be its payout ratio? Round your answer to two decimal places. %

Blossom Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $450,000, has an expected useful life of 11 years, a salvage value of zero, and is expected to increase net annual cash flows by $73,500. Project B will cost $298,000, has an expected useful life of 11 years, a salvage value of zero, and is expected to increase net annual cash flows by $50,200. A discount rate of 9% is appropriate for both projects. Click here to view PV table. Compute the net present value and profitability index of each project. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round present value answers to O decimal places, e.g. 125 and profitability index answers to 2 decimal places, e.g. 15.25. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Net present value - Project A Profitability index - Project A Net present value - Project B…

Management is considering two alternatives. Alternative A has projected revenue per year of $100,000 and costs of $70,000 while Alternative B has revenue of $100,000 and costs of $60,000. Both projects require an initial investment of $250,000 of which $75,000 has already been set aside and will be used as a down payment on the project that is chosen. There are also other qualitative factors that management must consider before making a final choice.Required: Which of the following statements is correct about relevant costs and relevant revenues. a. The sunk cost of $75,000 is relevant b. The projected revenues are relevant to the decision c. The only relevant item are the costs as they differ between alternative d. The initial investment of $250,000, the projected revenues, and the projected costs are all relevant

Kansas furniture Corporation (KFC) is evaluating a capital budgeting project that costs $34,000 and is expected to generate after-tax cash flows equal to $14,150 per year for three years. KFC's required rate of return is 12 percent. Compute the projects (a) net present value (NPV) and (b) internal rate of return (IRR). (c) Should the project be purchased?

Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year for 5 years. Project L costs $25,000 and is expected to produce cash flows of $7,400 per year for 5 years. Calculate the two projects’ NPVs, IRRs, assuming a cost of capital of 12%. Which project would be selected, assuming they are mutually exclusive, using each ranking method? Which should actually be selected?