ementsWhat is the total Wealth Accumulation of the following investment assuming theavailable after tax reinvestment rate is 5%?IRR 10.70%O $4,690,000O $4,821,078O $4,848,844$4,905.989n0 $1 S2$3 $AS5 $Investment$(3,000,000)240,000250,000260,000266,0003,674,000

Total Wealth Accumulated refers to the total amount accumulated after compounding at a specified…

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Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Raghubhai
Use the following information Year 0 1 2 3 Cash flow -$1000 $300 $500 $700 WACC= 8.0% Calculate: a) NPV b) IRR c) Payback d) MIRR e) EAA
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A plastic manufacturing company that makes four major products seeks to expand its operations in the coming year. At the beginning of the financial year, the company must decide on which of four new machines A, B, or C to purchase to be able to meet total annual demand. Each machine operates 14 hours a day, 360 days a year. Machine A costs GH¢43,000, machine B costs GH¢37,500 and machine C costs GH¢75,000. The following product forecasts and processing times have been projected: Demand, units/year Processing times per Unit (Minutes) Product Machine A Machine B Machine CPenholders 16,000 5 3 6Bowls 14,000 4 3 5Cups 6,000 6 5 7Carrier Bags 24,000 3…
Question 7: For the cash flows below, find the value of x that makes the equivalent annual worth in years 1 through 7 equal to $300 per year. Use an interest rate of 10% per year. Year 0 1 2 3 Answer: $619.88 Cash Flow,$ 200 200 200 200 Year 4 5 6 7 Cash Flow, $ X 200 200 200
Income from Net Cash Year Operations Flow $100,000 $180,000 2 40,000 120,000 40,000 100,000 10,000 90,000 10,000 120,000 The net present value for this investment is 4, 5.
1. 2. 3. 4. 5. Present Value ? $36,289 15,884 46,651 15,376 Future Value $ 40,000 65,000 40,000 100,000 ? i 10% 5 ? 10 8 ? n 7 ? 8 20
ve What is the modified internal rate of return for the following cashflow? CFO ($8,250,000) 19.52% O 26.41% 32.11% O 14.03% CF₁ $4,950,000 i = 9% CF₂ H $4,950,000 CF 3 CF4 ($1,850,000) $4,550,000 CF5 H $2,850,000
O What is the present value of the following cash flow stream at a rate of 17%? $8,442 $7,304 $9.485 $8,821 $11,762 Years: CFS: 0 $0 1 $1,500 2 $3,000 3 $4,500 4 $6,000
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What is the present value of the following cash flow stream at a rate of 6.25%? $411.57 $433.23 $456.03 $480.03 $505.30
($ thousands) Present value at 19% Net cash flow Net present value 0 1 4 -13,700 -1,594 -13,700 -1,339 3,541 (sum of PVs). Period 2 3 6 3,057 6,433 10,644 10,095 5,867 2,159 3,817 5,308 4,230 2,066 5 7 3,379 1,000 Restate the above net cash flows in real terms. Discount the restated cash flows at a real discount rate. Assume a 19% nominal rate and 11% expected inflation. NPV should be unchanged at +3,541, or $3,541,000. Note: Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in thousands rounded to the nearest whole number. Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Real Net Cash Flows NPV

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What is the total Wealth Accumulation of the following available after tax reinvestment rate is 5%? IRR 10.70% O $4.690.000 $4,821.078 $4,848,844 $4,905.989 Investment $ (3,000,000) 240,000 250,000 260,000 n 0$ 1 $ 2 $ 3 $ AS 266,000 5 $ 3,674,000