The Net Present Value for each project and its acceptability. Introduction: The difference over the present value of cash inflows and the present value of cash outflows over a time period is known as the Net Present value.

Question

1. Give one new distribution channels for Virtual Assistance (freelance business) that is not commonly used. - show a chart/diagram to illustrate the flow of the distribution channels. - explain the rationale behind it. (e.g., increased market reach, improved customer experience, cost-efficiency). - connect the given distribution channel to the marketing mix: (How does it align with the overall marketing strategy? Consider product, price, promotion, and place.). - define the target audience: (Age, gender, location, interests, etc.). - lastly, identify potential participants: (Wholesalers, retailers, online platforms, etc.)

Answer 1

Question

Chapter 10, Problem 10.23P

a)

Summary Introduction

To determine:

The Net Present Value for each project and its acceptability.

Introduction:

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

b)

Summary Introduction

To determine:

The Internal rate of return for each of the project.

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, which makes the net present value of all cash flows from an investment as zero.

c)

Summary Introduction

To determine:

The Net Present Value profiles for each project.

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.

NPV=CF1(1+r)1+CF2(1+r)2+CF3(1+r)3+CF4(1+r)4−I0 (1)

NPV profile is a graphic representation of the NPV of a project at different discount rates.

d)

Summary Introduction

To determine:

Evaluate the projects based on the NPV, IRR and NPV profile values.

Introduction:

The difference over the present value of cash inflows and the present value of cash outflows over a period 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. NPV profile is a graphic representation of the NPV of a project at different discount rates.

e)

Summary Introduction

To determine:

The pattern of cash inflows to the projects.

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.

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1. Give one new distribution channels for Virtual Assistance (freelance business) that is not commonly used. - show a chart/diagram to illustrate the flow of the distribution channels. - explain the rationale behind it. (e.g., increased market reach, improved customer experience, cost-efficiency). - connect the given distribution channel to the marketing mix: (How does it align with the overall marketing strategy? Consider product, price, promotion, and place.). - define the target audience: (Age, gender, location, interests, etc.). - lastly, identify potential participants: (Wholesalers, retailers, online platforms, etc.)

An individual is planning for retirement and aims to withdraw $100,000 at the beginning of each year, starting from the first year of retirement, for an expected retirement period of 20 years. To fund this retirement plan, he intends to make 20 equal annual deposits at the end of each year during his working years. Assume a simple annual interest rate of 20% during his working years and a simple annual interest rate of 5% during retirement. What should his annual deposit amount be to achieve his desired retirement withdrawals? Please write down the steps of your calculation and explain result economic meaning.

Assume an investor buys a share of stock for $18 at t=0 and at the end of the next year (t=1), he buys 12 shares with a unit price of $9 per share. At the end of Year 2 (t=2), the investor sells all shares for $40 per share. At the end of each year in the holding period, the stock paid a $5.00 per share dividend. What is the annual time-weighted rate of return? Please write down the steps of your calculation and explain result economic meaning.

Answer 2

Question

Chapter 10, Problem 10.23P

a)

Summary Introduction

To determine:

The Net Present Value for each project and its acceptability.

Introduction:

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

b)

Summary Introduction

To determine:

The Internal rate of return for each of the project.

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, which makes the net present value of all cash flows from an investment as zero.

c)

Summary Introduction

To determine:

The Net Present Value profiles for each project.

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.

NPV=CF1(1+r)1+CF2(1+r)2+CF3(1+r)3+CF4(1+r)4−I0 (1)

NPV profile is a graphic representation of the NPV of a project at different discount rates.

d)

Summary Introduction

To determine:

Evaluate the projects based on the NPV, IRR and NPV profile values.

Introduction:

The difference over the present value of cash inflows and the present value of cash outflows over a period 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. NPV profile is a graphic representation of the NPV of a project at different discount rates.

e)

Summary Introduction

To determine:

The pattern of cash inflows to the projects.

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.

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Answer 3

Question

Chapter 10, Problem 10.23P

a)

Summary Introduction

To determine:

The Net Present Value for each project and its acceptability.

Introduction:

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

b)

Summary Introduction

To determine:

The Internal rate of return for each of the project.

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, which makes the net present value of all cash flows from an investment as zero.

c)

Summary Introduction

To determine:

The Net Present Value profiles for each project.

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.

NPV=CF1(1+r)1+CF2(1+r)2+CF3(1+r)3+CF4(1+r)4−I0 (1)

NPV profile is a graphic representation of the NPV of a project at different discount rates.

d)

Summary Introduction

To determine:

Evaluate the projects based on the NPV, IRR and NPV profile values.

Introduction:

The difference over the present value of cash inflows and the present value of cash outflows over a period 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. NPV profile is a graphic representation of the NPV of a project at different discount rates.

e)

Summary Introduction

To determine:

The pattern of cash inflows to the projects.

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.

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Answer 4

Question

Chapter 10, Problem 10.23P

a)

Summary Introduction

To determine:

The Net Present Value for each project and its acceptability.

Introduction:

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

b)

Summary Introduction

To determine:

The Internal rate of return for each of the project.

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, which makes the net present value of all cash flows from an investment as zero.

c)

Summary Introduction

To determine:

The Net Present Value profiles for each project.

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.

NPV=CF1(1+r)1+CF2(1+r)2+CF3(1+r)3+CF4(1+r)4−I0 (1)

NPV profile is a graphic representation of the NPV of a project at different discount rates.

d)

Summary Introduction

To determine:

Evaluate the projects based on the NPV, IRR and NPV profile values.

Introduction:

The difference over the present value of cash inflows and the present value of cash outflows over a period 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. NPV profile is a graphic representation of the NPV of a project at different discount rates.

e)

Summary Introduction

To determine:

The pattern of cash inflows to the projects.

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.

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Answer 5

Chapter 10, Problem 10.23P

a)

Summary Introduction

To determine:

The Net Present Value for each project and its acceptability.

Introduction:

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

b)

Summary Introduction

To determine:

The Internal rate of return for each of the project.

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, which makes the net present value of all cash flows from an investment as zero.

c)

Summary Introduction

To determine:

The Net Present Value profiles for each project.

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.

NPV=CF1(1+r)1+CF2(1+r)2+CF3(1+r)3+CF4(1+r)4−I0 (1)

NPV profile is a graphic representation of the NPV of a project at different discount rates.

d)

Summary Introduction

To determine:

Evaluate the projects based on the NPV, IRR and NPV profile values.

Introduction:

The difference over the present value of cash inflows and the present value of cash outflows over a period 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. NPV profile is a graphic representation of the NPV of a project at different discount rates.

e)

Summary Introduction

To determine:

The pattern of cash inflows to the projects.

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 6

Chapter 10, Problem 10.23P

a)

Summary Introduction

To determine:

The Net Present Value for each project and its acceptability.

Introduction:

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

Answer 7

Chapter 10, Problem 10.23P

a)

Summary Introduction

To determine:

The Net Present Value for each project and its acceptability.

Introduction:

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

Answer 8

b)

Summary Introduction

To determine:

The Internal rate of return for each of the project.

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, which makes the net present value of all cash flows from an investment as zero.

Answer 9

b)

Summary Introduction

To determine:

The Internal rate of return for each of the project.

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, which makes the net present value of all cash flows from an investment as zero.

Answer 10

c)

Summary Introduction

To determine:

The Net Present Value profiles for each project.

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.

NPV=CF1(1+r)1+CF2(1+r)2+CF3(1+r)3+CF4(1+r)4−I0 (1)

NPV profile is a graphic representation of the NPV of a project at different discount rates.

Answer 11

c)

Summary Introduction

To determine:

The Net Present Value profiles for each project.

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.

NPV=CF1(1+r)1+CF2(1+r)2+CF3(1+r)3+CF4(1+r)4−I0 (1)

NPV profile is a graphic representation of the NPV of a project at different discount rates.

Answer 12

d)

Summary Introduction

To determine:

Evaluate the projects based on the NPV, IRR and NPV profile values.

Introduction:

The difference over the present value of cash inflows and the present value of cash outflows over a period 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. NPV profile is a graphic representation of the NPV of a project at different discount rates.

Answer 13

d)

Summary Introduction

To determine:

Evaluate the projects based on the NPV, IRR and NPV profile values.

Introduction:

The difference over the present value of cash inflows and the present value of cash outflows over a period 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. NPV profile is a graphic representation of the NPV of a project at different discount rates.

Answer 14

e)

Summary Introduction

To determine:

The pattern of cash inflows to the projects.

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 15

e)

Summary Introduction

To determine:

The pattern of cash inflows to the projects.

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 16

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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...

The Net Present Value for each project and its acceptability. Introduction: The difference over the present value of cash inflows and the present value of cash outflows over a time period is known as the Net Present value.

Solution Summary: The author explains the Net Present Value for each project and its acceptability.

Concept explainers

To determine:

The Net Present Value for each project and its acceptability.

Introduction:

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

To determine:

The pattern of cash inflows to the projects.

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.

Chapter 10 Solutions

The Net Present Value for each project and its acceptability. Introduction: The difference over the present value of cash inflows and the present value of cash outflows over a time period is known as the Net Present value.

Solution Summary: The author explains the Net Present Value for each project and its acceptability.

Concept explainers

To determine: The Net Present Value for each project and its acceptability. Introduction: The difference over the present value of cash inflows and the present value of cash outflows over a time period is known as the Net Present value.

To determine: The pattern of cash inflows to the projects. 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.

Chapter 10 Solutions

To determine:

The Net Present Value for each project and its acceptability.

Introduction:

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

To determine:

The pattern of cash inflows to the projects.

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.