Concept explainers
a)
To modify: The capital budgeting model if most of two projects 3, 5, and 6 can be selected.
Introduction: The variation between the present value of the
b)
To modify: The capital budgeting model if investment 5 and 1 is selected.
Introduction: The variation between the present value of the cash outflows and the present value of the cash inflows are known as the Net Present Value (NPV).
c)
To modify: The capital budgeting model if one of investments 1 and 2 are selected.
Introduction: The variation between the present value of the cash outflows and the present value of the cash inflows are known as the Net Present Value (NPV).
d)
To modify: The capital budgeting model if investment 5, 3,and 4 are selected.
Introduction: The variation between the present value of the cash outflows and the present value of the cash inflows are known as the Net Present Value (NPV).
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Chapter 6 Solutions
Practical Management Science, Loose-leaf Version
- Mr. King invested $30,000 in the First Eagle fund in year 2004. He continued to invest in the same fund from 2005 to 201 las in the following schedule: Year 2005 $30,000 Y ear 2006 $50,000 Year 2007 $50,000 Year 2008 $150,000 Year 2011 $100,000 All the dividends distributed by the company from time to time were reinvested in the same fund. In year 2012 Mr. King received a report showing a total balance of $548,360 in his account. What is the internal Rate of return of Mr. King's investments in the mutual fund? Answer: 7% (Note: cash flows in 2009 and 2010 are 0.) Show work in Excelarrow_forwardIf workers contribute to their group’s investments and decide on these investments, workers at different stages of their careers may want different types of capital, for example a durable building versus a temporary one. a. How might the age distribution of the workers make the building they choose to build too temporary or too durable? How can a building be too durable? b. There are also young and old shareholders. Why isn’t the choice of the building’s durability also a problem if they or an elected management makes the decision on it?arrow_forwardOver the next three years, the expected path of 1-year interest rates is 4, 1, and 1 percent, and the 1-yaer, 2-year, and 3-year term premia are 0, 1, and 2 percent, respectively. The liquidity premium theory of the term structure predicts that the yield curve Question 4 options: slopes upward. has a ^ shape. slopes downward. has a V shape.arrow_forward
- A. Write a document with the following information: 1. What do you expect your job to pay when you start? 2. What benefits are musts for you? 3. What benefits would you like to have even though they are not musts? 4. Include the graph you generate in step B below. B. Create a spreadsheet and a graph of life vs funds For each year of your remaining life specify the amount you plan to save/invest/withdraw that year and how much you expect that amount to increase during the year (base on actual data – typical savings interest rate, typical stock market interest rate, typical CDs, typical…). Calculate how much your funds will increase/decrease over your life and create a life (x-axis) vs funds (y-axis) plot.arrow_forwardPls help ASAP on botharrow_forwardPls help ASAP for botharrow_forward
- The general fund revenue receipts for the state of Kentucky for 2003 (period 1) to (period 15 ) follows. Do not round intermediate calculations. Budget Year Period ($billions) 2003 1 6.785 2004 2 6.973 2005 3 7.647 2006 4 8.373 2007 5 8.579 2008 6 8.666 2009 7 8.428 2010 8 8.223 2011 9 8.755 2012 10 9.097 2013 11 9.301 2014 12 9.554 2015 13 9.963 2016 14 10.334 2017 15 10.474 A. Develop a linear trend equation for this time series. Round your answers to 4 decimals. Tt = ____+ _____t B. What is the forecast for 16 period ? Round your answer to two decimal places. $_____billionarrow_forwardProblems LU - 2 Wally Beaver won a lottery and will receive a check for $2,500 at the beginning of each 6 months for the next 6 years. If Wally deposits each check into an account that pays 6%, how much will he have at the end of the 6 years?arrow_forwarddu/courses/423127/quizzes/3325 take/questions/60963079 Table on the right shows the net cashflow (NCF) and cumulative cashflow for two projects X and Y. Answer the following questions. 1- Based on Descarte's rule of signs, what is the max. number of real ROR (i*) for project X? (put numerical number) 2- Looking at cumulative CF of project X, can we tell that it has only one positive i* value? (put "yes" Project X Project Y Year NCF Cumulative CE NCF Cumulative CF or "no") 180 -100 20,000 20,000 1 50 -130 16,000 36,000 3- Based on Descarte's rule of signs, what is the 36,000 2 50 80 50 30 25,000 25,000 max. number of real ROR (i*) for project Y? (put 4 50 20 30,000 5,000 numerical number) 4- Looking at cumulative CF of project Y, can we tell that it has only one positive i* value? (put "yes" or "no")arrow_forward
- Assignment 1 Adom Ltd, is a private company in Ghana operating in the manufacturing sec Below is a Statement of financial position and a summarized statement of income with comparatives for the year ended 31stDecember 2019. Statement of Financial Position as at 31 December 2019: Non-Current Assets 2019 2018 GH¢ GH¢ Property, Plant & Equipment 200,000 250,000 Research & Development 40,000 - 240,000 250,000 Current Assets Available For Sale Investments 12,000 20,000 Inventory 70,000 45,000 Trade Receivables 30,000 23,000 Cash and Cash equivalents 18,000 17,000 130,000 105,000 370,000 355,000 Equity Equity Share Capital(GH¢1 per Share) 150,000 100,000 10%PreferenceShareCapital 50,000 50,000 Retained Earnings 60,000 55,000 260,000 205,000 Non-Current Liabilities 10% Loan Note 50,000 90,000 12%…arrow_forwardb) A management consulting firm has a backlog of 4 contracts. Work on these contracts must be started immediately. Three project leaders are available for assignment to the contracts. Because of the varying work experience of the project leaders, the profit (in R'000) to consulting firm will vary based on the assignment shown in Table 2. The unassigned contract can be completed by subcontracting the work to an outside consultant. Table 2: Profits Contract Project Leader 1 2 3 4 A 13 10 9 11 B 15 17 13 20 с 6 8 11 7 Find the optimal assignment and give the total assignment profit.arrow_forwardThe subject property has a pool valued at $30,000 and two bathrooms valued at $10,000 each. Comp 1 does not have a pool and has one less bathroom than the subject property. What adjustments should be made to Comp 1's value? add $20,000 to Comp 1's value add $40,000 to Comp 1's value subtract $20,000 from Comp 1's vatue subtract $40,000 from Comp 1's valuearrow_forward
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