The internal rate of return .

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Answer 1

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Chapter 10, Problem 4SP

a)

Summary Introduction

To determine: The internal rate of return.

b)

Summary Introduction

To determine: The internal rate of return.

c)

Summary Introduction

To determine: The internal rate of return.

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Assume a firm has earnings before depreciation and taxes of $200,000 and no depreciation. It is in a 25 percent tax bracket. a. Compute its cash flow using the following format: Earnings before depreciation and taxes _____Depreciation _____Earnings before taxes _____Taxes @ 25% _____Earnings after taxes _____Depreciation _____Cash Flow _____ b. Compute the cash flow for the company if depreciation is $200,000. Earnings before depreciation and taxes _____Depreciation _____Earnings before taxes _____Taxes @ 25% _____Earnings after taxes _____Depreciation _____Cash Flow _____ c. How large a cash flow benefit did the depreciation provide?

Assume a $40,000 investment and the following cash flows for two alternatives. Year Investment X Investment Y 1 $6,000 $15,000 2 8,000 20,000 3 9,000 10,000 4 17,000 — 5 20,000 — Which of the alternatives would you select under the payback method?

The Short-Line Railroad is considering a $140,000 investment in either of two companies. The cashflows are as follows:Year Electric Co. Water Works1.................. $85,000 $30,0002.................. 25,000 25,0003.................. 30,000 85,0004–10............ 10,000 10,000a. Using the payback method, what will the decision be?b. Using the Net Present Value method, which is the better project? The discount rate is 10%.

Answer 2

Question

Chapter 10, Problem 4SP

a)

Summary Introduction

To determine: The internal rate of return.

b)

Summary Introduction

To determine: The internal rate of return.

c)

Summary Introduction

To determine: The internal rate of return.

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Answer 3

Question

Chapter 10, Problem 4SP

a)

Summary Introduction

To determine: The internal rate of return.

b)

Summary Introduction

To determine: The internal rate of return.

c)

Summary Introduction

To determine: The internal rate of return.

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Answer 4

Question

Chapter 10, Problem 4SP

a)

Summary Introduction

To determine: The internal rate of return.

b)

Summary Introduction

To determine: The internal rate of return.

c)

Summary Introduction

To determine: The internal rate of return.

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Answer 5

Chapter 10, Problem 4SP

a)

Summary Introduction

To determine: The internal rate of return.

b)

Summary Introduction

To determine: The internal rate of return.

c)

Summary Introduction

To determine: The internal rate of return.

Answer 6

Chapter 10, Problem 4SP

a)

Summary Introduction

To determine: The internal rate of return.

Answer 7

Chapter 10, Problem 4SP

a)

Summary Introduction

To determine: The internal rate of return.

Answer 8

b)

Summary Introduction

To determine: The internal rate of return.

Answer 9

b)

Summary Introduction

To determine: The internal rate of return.

Answer 10

c)

Summary Introduction

To determine: The internal rate of return.

Answer 11

c)

Summary Introduction

To determine: The internal rate of return.

Answer 12

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Answer 13

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Answer 15

Ch. 10 - Why is capital budgeting such an important...Ch. 10 - What are the disadvantages of using the payback...Ch. 10 - Prob. 4RQ Ch. 10 - What are mutually exclusive projects? Why might...Ch. 10 - Prob. 6RQ Ch. 10 - When might two mutually exclusive projects having...Ch. 10 - Prob. 1SP Ch. 10 - Prob. 2SP Ch. 10 - Prob. 3SP Ch. 10 - Prob. 4SP

The internal rate of return .

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To determine: The internal rate of return.

To determine: The internal rate of return.

To determine: The internal rate of return.

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