Q: the future value
A: Introduction: Ordinary annuity is an annuity in which the payments are made at the end of a…
Q: present value is the
A: https://docs.google.com/document/d/19Usy902_lK6tWQ3RgtQiUedGybbYnqlidq6sySnT8YI/edit
Q: Define total net present value (TNPV)
A: Total net present value of an investment is the present value of the future cash inflows due to a…
Q: e present value annuity factor
A: An annuity factor is a process of determining the amount which can be withdrawn initially from the…
Q: Difference between present value and net present value.
A: Present value (PV) is the current value of a future sum of money or stream of cash flow given a…
Q: How did they calculate the present value?
A: The current value of the cash flow or stream of cash flow after discounting is termed as the present…
Q: What is net present value?
A:
Q: Define return rate
A: The return rate can be calculated on various assets and can be used to compare various investments.…
Q: What is the name principal future value a. b. Ob
A: Annuity refers to a series of payments that are made at equal intervals of time.They can be…
Q: Give me the formula of net present value
A: Net Present Value of a project is equivalent to the difference between the present value of cash…
Q: With the given information, find the Net Present Value (NPV).
A: The net worth of the project after the deduction of the current worth of the cash outflows from the…
Q: Required: i. Using present-value method, determine the best alternative ii. Using the internal rate…
A: By using present value method , debt alternative carrying interest of 10% is the best alternative…
Q: Explain present value of annuity, PVA
A: An annuity is the series of payments which is received or paid for a fixed period of time. The equal…
Q: What is the relationship between present value and future value?
A: Future Value : FV is that value which will be received in near future. Present Value : PV is that…
Q: What is future value, FV?
A: Future Value: The future value is the value of the present amount compounded at an interest rate…
Q: e present value and future v
A: Given information : Quarterly payments 2000 Time period (years) 5 Interest rate 6.50% The…
Q: What is limitation of Payback period, Net Present Value (NPV) and Internal rate of return (IRR).…
A: i) Payback period: Payback period is the expected time period which is required to recover the cost…
Q: a present value is converted to a future value through compounding, explain this to me.
A: Present value (PV) is the amount of money one is having today. Future value (FV) is how much money…
Q: present worth analysis, whic
A: Introduction: Present worth analysis is defined as analysis in which the cash flows of the project…
Q: How do you calculate present value?
A: Present value:Present value (PV) refers to the current value of future money.
Q: Define Interest cost.
A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…
Q: compare Future Value and Present Value?
A: The comparison between present value and future value is as follows:
Q: Define the term present Value.
A: Future Value: The future value means that value of the investment which will be realized in the…
Q: Explain the purpose of the net present value.
A: Capital budgeting involves taking decisions related to investments in long-term assets or investment…
Q: e Internal rate of return
A: The following problem can be solved using XIRR function in excel.
Q: e value?
A: Future value refers to the concept of comparing the expected outcome of a project or asset in the…
Q: What is the definition of “actuarial present value”?
A: Accumulated Benefit Obligation: It is an inexact rate of a company's pension plan liability towards…
Q: compute the present value of interest and the principle amount
A: Present value is the sum of present value of future cashflow discounted with the required rate of…
Q: 8. How should internal rate of return be calculated in terms of Net Present Value?
A: For a given project, there is a cost incurred at the beginning. It is called the Initial cost of the…
Q: What is the net present value method?
A: Net Present Value Method: It is the present value of the annual cash flows and the project initial…
Q: Explain the Compound or Future Value?
A: Future value: Future value (FV) is the esteem of an existing property at a future time, based on an…
Q: What is present value interest factor?
A: The present value interest factor is a mathematical equation used to estimate today's value of money…
Q: The present value that must be invested
A: Interest charged on the principal amount at a fixed rate for a fixed period of time is known as…
Q: What is future value interest factor?
A: Introduction: The future value is the value of single present amount accumulated at a rate of…
Q: Which of these is the present value?
A: Present Value: It is the present worth of the annual cash flows discounted at a rate of interest for…
Q: What is Net realizable value?
A: Net realizable value means the amount that could be received after deducted all incidental expenses…
Q: Present Value versus Future Value
A: Present value is the amount at time "t=0". This is the value of an investment today or in present…
Q: Discuss the advantages and disadvantages of the Net present value
A: Net present value is the method of capital budgeting that helps in determining the present value of…
Q: what is the total value
A: Introduction: The term perpetuity is also an annuity wherein the series of payments would continue…
Q: the market value of A
A: In this case of borrowing we buy cap from market at swap rate, if market interest rate is increased…
Q: e future value nd an initial
A: Introduction : The given question relates to the concept of compounding. Compounding can be…
Q: a) Total future value. b) Total present value.
A: Time value of money (TVM) refers to the method used to measure the amount of money at different…
Q: economic entitiy assumption
A: Accounting Assumptions: Accounting professionals are guided by the accounting…
Q: What is net present value? How does net preset value work?
A: Net present value:- Net present value is the investment evaluation technique, where we evaluate…
Q: What is Net Present Value (NPV)?
A: Time value of money: Time value of money refers to the concept that the value of money available at…
Q: net present value (NPV)
A: Net Present Value is the summation of future cash flows discounted at the required return. A project…
Q: What is the meaning of present value (PV
A: Present value could be a concept utilized by investors to calculate the current value of a firm's…
Step by step
Solved in 3 steps
- Redbird Company is considering a project with an initial investment of $265,000 in new equipment that will yield annual net cash flows of $45,800 each year over its seven-year life. The companys minimum required rate of return is 8%. What is the internal rate of return? Should Redbird accept the project based on IRR?Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year for 5 years. Project L costs $25,000 and is expected to produce cash flows of $7,400 per year for 5 years. Calculate the two projects’ NPVs, IRRs, MIRRs, and PIs, assuming a cost of capital of 12%. Which project would be selected, assuming they are mutually exclusive, using each ranking method? Which should actually be selected?Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated revenue producing life of 4 years. Falkland has a cost of capital of 8%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?
- Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a net cash inflow one year from now of 810,000. Assume the cost of capital is 10 percent. Required: 1. Break the 810,000 future cash inflow into three components: a. The return of the original investment b. The cost of capital c. The profit earned on the investment 2. Now, compute the present value of the profit earned on the investment. 3. Compute the NPV of the investment. Compare this with the present value of the profit computed in Requirement 2. What does this tell you about the meaning of NPV?Staten Corporation is considering two mutually exclusive projects. Both require an initial outlay of 150,000 and will operate for five years. The cash flows associated with these projects are as follows: Statens required rate of return is 10%. Using the net present value method and the present value table provided in Appendix A, which of the following actions would you recommend to Staten? a. Accept Project X and reject Project Y. b. Accept Project Y and reject Project X. c. Accept Projects X and Y. d. Reject Projects X and Y.ed Your company has a project available with the following cash flows: Year Cash Flow 0 -$80,900 12345 21,600 25,200 31,000 26,100 20,000 If the required return is 15 percent, should the project be accepted based on the IRR?
- You are asked to analyze the following scenario and determine its value. What it the most you would be willing to invest in this project if your required rate of return is 11%. (Assume cash flows occur at the end of each year). Cash flows Year 1-3: $150,000,000 Year 4: ($550,000,000) Year 5-10: $175,000,000 O $845,654,114 O $491,942,778 $346,568,100 $263,458,478Find internal rate of return of a project with an initial cost of $43,000, expected net cash inflows of $9,550 per year for 8 years, and a cost of capital of 9.35%. Round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer is .05718 or 5.718% round as 5.72. A. 15.64% B. 14.90% C. 13.70% D. 14.75% E. 11.17%Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$ 491,000 –$ 92,000 1 114,000 52,000 2 134,000 36,000 3 79,000 33,500 4 474,000 28,600 Whichever project you choose, if any, you require a 15% return on your investment. What is the IRR for each project? (Round the final answers to 2 decimal places.) If you apply the IRR criterion, which investment will you choose? Project A Project B What is the profitability index for each project? (Do not round intermediate calculation. Round the final answers to 3 decimal places.) Project A Project B If you apply the profitability index criterion, which investment will you choose? Project A Project B Based on your answers in (a) through (e), which project will you finally choose? Project A Project B
- A firm evaluates a project with the following cash flows. The firm has a 2 year payback period criteria and a required return of 17 percent.YearCash flow (OMR)year 0= -39,000year 1= 28,000year 2= 19,000year 3= 14,000year 4= -12,000year 5= 10,000 What is the net present value for the project?Consider the following two mutually exclusive projects: YEAR CASH FLOW (A) CASH FLOW (B)0 -$300,000 -$39,0001 20,000 18,0002 70,000 12,0003 80,000 18,0004 400,000 19,000 Whichever project you choose, if any, you require a 15 percent return on your investment.i) If you apply the payback period (PBP) criterion, which investment will you choose? Why?ii) If you apply the net present value (NPV) criterion, which investment will you choose? Why?iii) If you apply the profitability index (PI) criterion, which investment will you choose? Why?iv) If you apply the internal rate of return (IRR) criterion, which investment will you choose?Why?v) Based on your answers in (i) through (iv), which project will you finally…Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash outlay of $80,000 and expected free cash flows of $22,000at the end of each year for 5 years. The required rate of return for this project is 7 percent. a. What is the project's payback period? b. What is the project's NPV? c. What is the project's PI? d. What is the project's IRR?