YearCash Flow (A)Cash Flow (B)0-$ 427,000-$ 41,000143,00020,600263,00013,100380,00019,6004542,00016,400The required return on these investments is 13 percent.a. What is the payback period for each project?Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.b. What is the NPV for each project?Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.c. What is the IRR for each project?Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.d. What is the profitability index for each project?Note: Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.e. Based on your answers in (a) through (d), which project will you finally choose? (Note: if conclusions with evaluation methodsdisagree, choose project with highest NPV.)a. Project AProject Bb. Project AProject Bc. Project AProject Bd. Project AProject Be.yearsyears%%

a)Project A:Initial Investment: -$427,000Yearly Cash Flows:Year 1: $43,000Year 2: $63,000Year 3:…

Answered: Year Cash Flow (A) Cash Flow (B) 0 -$…

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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Compute the payback statistic for Project A if the appropriate cost of capital is 7 percent and the maximum allowable payback period is four years. (Round your answer to 2 decimal places.) Project A Time: 0 1 2 3 4 5 Cash flow: −$1,100 $390 $510 $540 $320 $120 Should the project be accepted or rejected?multiple choice accepted rejected
A $169,700 initial investment will generate the following present values of net cash flows. What is the break-even time for this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) Note: Round "Break-even time" answer to 1 decimal place. Year Initial investment 1. 2. 3. 4. 5. Break-even time Present Value of Net Cash Flows. $ (169,700) 51,818 47,105 37,888 38,931 35,391 Cumulative Present Value of Net Cash Flows $ (169,700) (117,882) (70,777) (32,889) years 6,042 41,433
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Annual cash inflows that will arise from two competing investment projects are given below: Year Investment A Investment B 1 $7,000 $ 10,000 2 8,000 3 9,000 4 10,000 $ 34,000 9,000 8,000 7,000 $ 34,000 The discount rate is 7%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: Compute the present value of the cash inflows for each investment.
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Compute the payback statistic for Project A if the appropriate cost of capital is 7 percent and the maximum allowable payback period is four years. (Round your answer to 2 decimal places.) Project A Time: 0 1 2 3 4 5 Cash flow: −$2,300 $870 $870 $780 $560 $360
Compute the payback statistic for Project A if the appropriate cost of capital is 9 percent and the maximum allowable payback period is four years. (Round your answer to 2 decimal places.) Project A Time: 0 1 2 3 4 5 Cash flow: −$2,100 $790 $810 $740 $520 $320 Payback: ? Years
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Duo Corporation is evaluating a project with the following cash flows: Year Cash Flow -$ 30,000 012345 12,200 14,900 16,800 13,900 -10,400 The company uses an interest rate of 8 percent on all of its projects. Calculate the MIRR of the project. (Do not round intermediate calculation your answer as a percent rounded to 2 decimal places, e.g., 32.16.) MIRR %
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