Beyer Company is considering buying an asset for $350,000. It is expected to produce the following net cash flows. Year 1 Year 2 $82,000 $45,000 Net cash flows Year Initial investment Year 1 Rad mit Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal places) Year 2 Year 3 Year 4 Year 5 Total S Net Cash Flows (350,000) 82.000 45.000 70,000 100,000 14.000 41.000 Year 3 $70,000 Cumulative Cash Flows Payback period. ne response was expected cal formula besed calcu S (391,000) 82.000 127.000 C 197,000 377.000 391,000 00 Year 4 $180,000 6.93 years Year 5 $14,000 rre: he pots deducted

Beyer Company is considering buying an asset for $350,000. It is expected to produce the following net cash flows. Year 1 Year 2 $82,000 $45,000 Net cash flows Year Initial investment Year 1 Rad mit Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal places) Year 2 Year 3 Year 4 Year 5 Total S Net Cash Flows (350,000) 82.000 45.000 70,000 100,000 14.000 41.000 Year 3 $70,000 Cumulative Cash Flows Payback period. ne response was expected cal formula besed calcu S (391,000) 82.000 127.000 C 197,000 377.000 391,000 00 Year 4 $180,000 6.93 years Year 5 $14,000 rre: he pots deducted

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter23: Other Topics In Working Capital Management

Section: Chapter Questions

Problem 2P: Optimal Cash Transfer Barenbaum Industries projects that cash outlays of 4.5 million will occur...

See similar textbooks

Similar questions

Optimal Cash Transfer Barenbaum Industries projects that cash outlays of 4.5 million will occur uniformly throughout the year. Barenbaum plans to meet its cash requirements by periodically selling marketable securities from its portfolio. The firms marketable securities are invested to earn 12%, and the cost per transaction of converting securities to cash is 27. a. Use the Baumol model to determine the optimal transaction size for transfers from marketable securities to cash. b. What will be Barenbaums average cash balance? c. How many transfers per year will be required? d. What will be Barenbaums total annual cost of maintaining cash balances? What would the total cost be if the company maintained an average cash balance of 50,000 or of 0 (it deposits funds daily to meet cash requirements)?
Exercise 26-3 (Algo) Payback period and unequal cash flows LO P1 Beyer Company is considering buying an asset for $400,000. It is expected to produce the following net cash flows. Year 2 $80,000 Year Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Total Year 1 $80,000 Net cash flows Compute the payback period for this investment. Note: Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal places. Net Cash Flows $ (400,000) Payback period=> Year 3 $70,000 Cumulative Cash Flows Year 4 $200,000 Year 5 $15,000
21 Beyer Company is considering the purchase of an asset for $210,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Net cash flows Year 0 1 2 3 4 5 Cash Inflow (Outflow) Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal place.) S (210,000) Year 1 $64,000 Payback period = Year 2 Year 3 Year 4 $33,000 $62,000 $150,000 Cumulative Net Cash Inflow (Outflow) Year 5 $28,000 Saved Total $337,000
Exercise 24-3 (Algo) Payback period and unequal cash flows LO P1 Beyer Company is considering buying an asset for $310,000. It is expected to produce the following net cash flows. Year 3 $70,000 Year 4 $250,000 Net cash flows Year Year 1 $80,000 Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Total Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal places.) Net Cash Flows $ (310,000) Payback period Year 2 $40,000 = Year 5 $18,000 Cumulative Cash Flows
Exhibit 8-1The cash flows associated with an investment project are as follows: Cash Flows Initial Outflow -$60,000 Year 1 $20,000 Year 2 $30,000 Year 3 $30,000 Year 4 $30,000 Refer to Exhibit 8-1. What’s the payback period of the project? If a firm’s cutoff payback period is 3 years, should it accept the project? Group of answer choices 2.3 years; accept the project 3.8 years; accept the project 3.8 years; reject the project 2.3 years; reject the project
Exercise 24-3 (Algo) Payback period and unequal cash flows LO P1 Beyer Company is considering buying an asset for $240,000. It is expected to produce the following net cash flows. Year 5 $25,000 Net cash flows Year Year 1 $60,000 Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Total Compute the payback period for this Investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Perlod answer to 2 decimal places.) Net Cash Flows $ (240,000) Year 2 $36,000 Payback period = Year 3 $60,000 Cumulative Cash Flows Year 4 $150,000
Francoeur Co. has identified an investment project with the following cash flows: Year 1 2 3 4 Cash Flow $830 $1,150 $1,410 $1,550 If the discount rate is 8 percent, what is the present value of these cash flows as of Year O? $4,013.06 $3,406.47 $3,679.59 $4,549.11 $4,271.21
Problem 5-29 Calculating Incremental Cash Flows Darin Clay, the CFO of MakeMoney.com, has to decide between the following two projects: Year Project Million Project Billion 0123 -$2,500 0-290 -$10 0+1,050 1.090 1.850 1,850 2,900 The expected rate of return for either of the two projects is 13 percent. What is the range of initial investment (0) for which Project Billion is more financially attractive than Project Million? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Initial investment less than
Please answer part c Payback Period, IRR, and Minimum Cash Flows The management of Mesquite Limited is currently evaluating the following investment proposal: Time 0 Year 1 Year 2 Year 3 Year 4 Initial investment $250,000 Net operating cash inflows $100,000 $100,000 $100,000 $100,000 G (a) Determine the proposal's payback period. 2.5 years (* (b) Determine the proposal's internal rate of return. (Refer to Appendix 24B if you use the table approach.) 22 (c) Given the amount of the initial investment, determine the minimum annual net cash inflows required to obtain an internal rate of return of 8 percent. Round the answer to the nearest dollar. $ 89,344 *
Annual cash inflows from two competing investment projects are given below: Investment A $ 4,000 5,000 6,000 7,000 $ 22,000 Year 1234 The discount rate is 10%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: Compute the present value of the cash inflows for each investment. Year 1 2 3 4 $ Investment B $ 7,000 6,000 5,000 4,000 $ 22,000 Present Value of Cash Flows Investment A 0 $ Investment B 0 M ...
Assume a $290,000 investment and the following cash flows for two products: Year Product X 1 A234 4 $ 100,000 100,000 75,000 40,000 Product Y $ 90,000 100,000 Product X Product Y 80,000 40,000 a. Calculate the payback for products X and Y. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. years years b. Which alternative would you select under the payback method? Product X is selected O Product Y is selected
Problem 6. Justine Global Info Tech records the following cash flows at the end of each year for a project. If the firm's discount rate is 11%, what is the PRESENT VALUE of the project? Year Cash Flow 1 P794,633.00 P542,149.00 P836,200.00 P716,080.00 P520,354.00 2 3 4 5