Payback period for the proposed investment. Introduction: Every investment requires a time period to pay back the cost of investment. The time period taken to recover the cost of an investment is known as the payback period.

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Answer 1

Question

Chapter 10, Problem 10.22P

a)

Summary Introduction

To determine:

Payback period for the proposed investment.

Introduction:

Every investment requires a time period to pay back the cost of investment. The time period taken to recover the cost of an investment is known as the payback period.

b)

Summary Introduction

To determine:

The Net Present Value for the proposed investment.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

c)

Summary Introduction

To determine:

The Internal rate of return the proposed investment.

Introduction:

Internal Rate of Return is a measure used in the capital budgeting which estimates the profitability of potential investments. IRR is computed as a discount rate that makes the net present value of all cash flows from an investment as zero.

d)

Summary Introduction

To determine:

Evaluation of acceptability of the proposed plan based on NPV and IRR.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. Internal Rate of Return is a measure used in the capital budgeting which estimates the profitability of potential investments. IRR is computed as a discount rate that makes the net present value of all cash flows from an investment as zero.

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Payback, NPV, and IRR Rieger International is evaluating the feasibility of investing $94,000 in a piece of equipment that has a 5-year life. The firm has estimated the cash inflows associated with the proposal as shown in the following table: . The firm has a 9% cost of capital. sons a. Calculate the payback period for the proposed investment. b. Calculate the net present value (NPV) for the proposed investment. c. Calculate the internal rate of return (IRR), rounded to the nearest whole percent, for the proposed investment. d. Evaluate the acceptability of the proposed investment using NPV and IRR. What recommendation would you make relative to implementation of the project? a. The payback period of the proposed investment is years. (Round to two decimal places.) b. The NPV of the proposed investment is $. (Round to the nearest cent.) c. The IRR of the proposed investment is %. (Round to two decimal places.) d. Should Rieger International accept or reject the proposed investment?…

Payback, NPV, and IRR Rieger International is evaluating the feasibility of investing $69,000 in a piece of equipment that has a 5-year life. The firm has estimated the cash inflows associated with the proposal as shown in the following table: . The firm has a 9% cost of capital. a. Calculate the payback period for the proposed investment. b. Calculate the net present value (NPV) for the proposed investment. c. Calculate the internal rate of return (IRR), rounded to the nearest whole percent, for the proposed investment. d. Evaluate the acceptability of the proposed investment using NPV and IRR. What recommendation would you make relative to implementation of the project? a. The payback period of the proposed investment is years. (Round to two decimal places.) Data Table |(Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Year (f) Cash inflows (CF) $25,000 $25,000 $20,000 $20,000 1 3 4 $20,000 Print Done Enter…

Payback, NPV, and IRR Rieger International is evaluating the feasibility of investing $106,000 in a piece of equipment that has a 5-year life. The firm has estimated the cash inflows associated with the proposal as shown in the following table: . The firm has a 9% cost of capital. a. Calculate the payback period for the proposed investment. b. Calculate the net present value (NPV) for the proposed investment. c. Calculate the internal rate of return (IRR), rounded to the nearest whole percent, for the proposed investment. d. Evaluate the acceptability of the proposed investment using NPV and IRR. What recommendation would you make relative to implementation of the project? a. The payback period of the proposed investment is years. (Round to two decimal places.) - X Data Table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Year (t) Cash inflows (CF) $40,000 $20,000 $35,000 $35,000 $35,000 1 4 Enter your…

Answer 2

Question

Chapter 10, Problem 10.22P

a)

Summary Introduction

To determine:

Payback period for the proposed investment.

Introduction:

Every investment requires a time period to pay back the cost of investment. The time period taken to recover the cost of an investment is known as the payback period.

b)

Summary Introduction

To determine:

The Net Present Value for the proposed investment.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

c)

Summary Introduction

To determine:

The Internal rate of return the proposed investment.

Introduction:

Internal Rate of Return is a measure used in the capital budgeting which estimates the profitability of potential investments. IRR is computed as a discount rate that makes the net present value of all cash flows from an investment as zero.

d)

Summary Introduction

To determine:

Evaluation of acceptability of the proposed plan based on NPV and IRR.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. Internal Rate of Return is a measure used in the capital budgeting which estimates the profitability of potential investments. IRR is computed as a discount rate that makes the net present value of all cash flows from an investment as zero.

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Answer 3

Question

Chapter 10, Problem 10.22P

a)

Summary Introduction

To determine:

Payback period for the proposed investment.

Introduction:

Every investment requires a time period to pay back the cost of investment. The time period taken to recover the cost of an investment is known as the payback period.

b)

Summary Introduction

To determine:

The Net Present Value for the proposed investment.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

c)

Summary Introduction

To determine:

The Internal rate of return the proposed investment.

Introduction:

Internal Rate of Return is a measure used in the capital budgeting which estimates the profitability of potential investments. IRR is computed as a discount rate that makes the net present value of all cash flows from an investment as zero.

d)

Summary Introduction

To determine:

Evaluation of acceptability of the proposed plan based on NPV and IRR.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. Internal Rate of Return is a measure used in the capital budgeting which estimates the profitability of potential investments. IRR is computed as a discount rate that makes the net present value of all cash flows from an investment as zero.

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Answer 4

Question

Chapter 10, Problem 10.22P

a)

Summary Introduction

To determine:

Payback period for the proposed investment.

Introduction:

Every investment requires a time period to pay back the cost of investment. The time period taken to recover the cost of an investment is known as the payback period.

b)

Summary Introduction

To determine:

The Net Present Value for the proposed investment.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

c)

Summary Introduction

To determine:

The Internal rate of return the proposed investment.

Introduction:

Internal Rate of Return is a measure used in the capital budgeting which estimates the profitability of potential investments. IRR is computed as a discount rate that makes the net present value of all cash flows from an investment as zero.

d)

Summary Introduction

To determine:

Evaluation of acceptability of the proposed plan based on NPV and IRR.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. Internal Rate of Return is a measure used in the capital budgeting which estimates the profitability of potential investments. IRR is computed as a discount rate that makes the net present value of all cash flows from an investment as zero.

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Answer 5

Chapter 10, Problem 10.22P

a)

Summary Introduction

To determine:

Payback period for the proposed investment.

Introduction:

Every investment requires a time period to pay back the cost of investment. The time period taken to recover the cost of an investment is known as the payback period.

b)

Summary Introduction

To determine:

The Net Present Value for the proposed investment.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

c)

Summary Introduction

To determine:

The Internal rate of return the proposed investment.

Introduction:

Internal Rate of Return is a measure used in the capital budgeting which estimates the profitability of potential investments. IRR is computed as a discount rate that makes the net present value of all cash flows from an investment as zero.

d)

Summary Introduction

To determine:

Evaluation of acceptability of the proposed plan based on NPV and IRR.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. Internal Rate of Return is a measure used in the capital budgeting which estimates the profitability of potential investments. IRR is computed as a discount rate that makes the net present value of all cash flows from an investment as zero.

Answer 6

Chapter 10, Problem 10.22P

a)

Summary Introduction

To determine:

Payback period for the proposed investment.

Introduction:

Every investment requires a time period to pay back the cost of investment. The time period taken to recover the cost of an investment is known as the payback period.

Answer 7

Chapter 10, Problem 10.22P

a)

Summary Introduction

To determine:

Payback period for the proposed investment.

Introduction:

Every investment requires a time period to pay back the cost of investment. The time period taken to recover the cost of an investment is known as the payback period.

Answer 8

b)

Summary Introduction

To determine:

The Net Present Value for the proposed investment.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

Answer 9

b)

Summary Introduction

To determine:

The Net Present Value for the proposed investment.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

Answer 10

c)

Summary Introduction

To determine:

The Internal rate of return the proposed investment.

Introduction:

Internal Rate of Return is a measure used in the capital budgeting which estimates the profitability of potential investments. IRR is computed as a discount rate that makes the net present value of all cash flows from an investment as zero.

Answer 11

c)

Summary Introduction

To determine:

The Internal rate of return the proposed investment.

Introduction:

Internal Rate of Return is a measure used in the capital budgeting which estimates the profitability of potential investments. IRR is computed as a discount rate that makes the net present value of all cash flows from an investment as zero.

Answer 12

d)

Summary Introduction

To determine:

Evaluation of acceptability of the proposed plan based on NPV and IRR.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. Internal Rate of Return is a measure used in the capital budgeting which estimates the profitability of potential investments. IRR is computed as a discount rate that makes the net present value of all cash flows from an investment as zero.

Answer 13

d)

Summary Introduction

To determine:

Evaluation of acceptability of the proposed plan based on NPV and IRR.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. Internal Rate of Return is a measure used in the capital budgeting which estimates the profitability of potential investments. IRR is computed as a discount rate that makes the net present value of all cash flows from an investment as zero.

Answer 14

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Answer 17

Ch. 10.1 - What is the financial managers goal in selecting...Ch. 10.2 - What is the payback period? How is it calculated?Ch. 10.2 - What weaknesses are commonly associated with the...Ch. 10.3 - How is the net present value (NPV) calculated for...Ch. 10.3 - Prob. 10.5RQ Ch. 10.3 - Prob. 10.6RQ Ch. 10.4 - Prob. 10.8RQ Ch. 10.4 - Prob. 10.9RQ Ch. 10.4 - Prob. 10.10RQ Ch. 10.5 - How is a net present value profile used to compare...

Payback period for the proposed investment. Introduction: Every investment requires a time period to pay back the cost of investment. The time period taken to recover the cost of an investment is known as the payback period.

Solution Summary: The author explains how to calculate the payback period for a proposed investment by calculating the cumulative cash inflows.

To determine:

Payback period for the proposed investment.

Introduction:

Every investment requires a time period to pay back the cost of investment. The time period taken to recover the cost of an investment is known as the payback period.

To determine:

The Net Present Value for the proposed investment.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

Want to see the full answer?

Chapter 10 Solutions

Payback period for the proposed investment. Introduction: Every investment requires a time period to pay back the cost of investment. The time period taken to recover the cost of an investment is known as the payback period.

Solution Summary: The author explains how to calculate the payback period for a proposed investment by calculating the cumulative cash inflows.

To determine: Payback period for the proposed investment. Introduction: Every investment requires a time period to pay back the cost of investment. The time period taken to recover the cost of an investment is known as the payback period.

To determine: The Net Present Value for the proposed investment. Introduction: The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

Want to see the full answer?

Chapter 10 Solutions

To determine:

Payback period for the proposed investment.

Introduction:

Every investment requires a time period to pay back the cost of investment. The time period taken to recover the cost of an investment is known as the payback period.

To determine:

The Net Present Value for the proposed investment.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.