Bramblett Recording Studio is considering two investment proposals (1 and 2). Data for the two proposals are presented below: Proposal 1 Proposal 2 Cost of investment $75,000 $100,000 Estimated salvage value 15,000 20,000 Average estimated net income 18,000 13,200 Calculate the return on average investment for both proposals.
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- Company A has provided figures for two investment projects, only one of which may be chosen. These are the calculations based on the figures: Payback Period The Accounting Rate of Return / Return on Capital Employed Net Present Value Project A 2 years 4 months 27.08% £63,705 Project B 2 years 7 months 39.47% £74.971 Analyse and provide recommendations as to what project needs to be chosen based on the calculations above.A company is considering three alternative investment projects with different net cash flows. The present value of net cash flows is calculated using Excel and the results follow. Potential Projects Present value of net cash flows (excluding initial investment) Initial investment Project A $ 11,226 (10,000) Project B $ 10,568 (10,000) a. Compute the net present value of each project. b. If the company accepts all positive net present value projects, which of these will it accept? c. If the company can choose only one project, which will it choose on the basis of net present value? Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the net present value of each project. Potential Projects Project A Project B Project C Present value of net cash flows Initial investment Net present value $ $ $Lobers, Inc., has two investment proposals, which have the following characteristics: PROJECT A PROJECT B PROFIT AFTER TAXES NET CASH FLOW PROFIT AFTER TAXES NET CASH FLOW PERIOD COST COST $9,000 $12,000 1 $1,000 $5,000 $1,000 $5,000 1,000 4,000 1,000 5,000 3 1,000 3,000 4,000 8,000 For each project, compute its payback period, its net present value, and its profitability index using a discount rate of 15 percent.
- A company is considering three alternative investment projects with different net cash flows. The present value of net cash flows is calculated using Excel and the results follow. Potential Projects Present value of net cash flows (excluding initial investment) Initial investment Project A $ 8,328 (10,000) Project B $ 10,809 (10,000) Project C $ 10,685 (10,000) a. Compute the net present value of each project. b. If the company accepts all positive net present value projects, which of these will it accept? c. If the company can choose only one project, which will it choose on the basis of net present value? Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the net present value of each project. Potential Projects Project A Project B Project C Present value of net cash flows Initial investment Net present valueLewis Services is evaluating six investment opportunities (projects). The following table reflects each project’s net present value NPV and the respective initial investments required. All of these projects are independent. Project NPV Investment I 2,500 2,500 II 4,000 20,000 III 7,500 30,000 IV 8,000 40,000 V 2,000 10,000 VI 2,500 5,000 Lewis has an investment constraint of P50,000. Which combination of projects would represent the optimal investment that should be recommended to Lewis Services’ management? Group of answer choices I, III, and VI I, II, III, IV, V, and VI I, II, III, V, and VI I, III, V, and VILewis Services is evaluating six investment opportunities (projects). The following table reflects each project’s net present value NPV and the respective initial investments required. All of these projects are independent. Project NPV Investment I 2,500 2,500 II 4,000 20,000 III 7,500 30,000 IV 8,000 40,000 V 2,000 10,000 VI 2,500 5,000 Lewis has an investment constraint of P50,000. Which combination of projects would represent the optimal investment that should be recommended to Lewis Services’ management? I, II, III, V, and VI I, II, III, IV, V, and VI I, III, and VI I, III, V, and VI
- Lewis Services is evaluating six investment opportunities (projects). The following table reflects each project’s net present value NPV and the respective initial investments required. All of these projects are independent. Project NPV Investment I 2,500 2,500 II 4,000 20,000 III 7,500 30,000 IV 8,000 40,000 V 2,000 10,000 VI 2,500 5,000 Lewis has an investment constraint of P50,000. Which combination of projects would represent the optimal investment that should be recommended to Lewis Services’ management? Choices a. I, II, III, IV, V, and VI b. I, III, and VI c. I, III, V, and VI d. I, II, III, V, and VIInvestment Criteria. Consider two mutually exclusive projects, A and B, whose costs and cash flows are shown in the following table: Year Project A Project B 1 $(15,000) $(22,840) 2 9,000 8,000 3 8,000 8,000 4 2,500 8,000 5 3,000 8,000 Calculate the cross over rate.Lewis Services is evaluating six investment opportunities (projects). The following table reflects each project's net present value NPV and the respective initial investments required. All of these projects are independent. Project NPV Investment 2,500 2,500 II 4,000 20,000 II 7,500 30,000 IV 8,000 40,000 2,000 10,000 VI 2,500 5,000 Lewis has an investment constraint of P50,000. Which combination of projects would represent the optimal investment that should be recommended to Lewis Services' management? O I. II, and VI O I, II, V, and VI O , II, II, IV, V, and VI OI, II, III, V, and VI
- ABC Company has calculated the net present value of two investment opportunities but must decide which option to pursue: Project X: Present value of cash flows = $117,000 Investment = $100,000 Net present value = $17,000 Project Z: Present value of cash flows = $138,000 Investment = $120,000 Net present value = $18,000 Complete the following: Present value ratio of Project X = Present value ratio of Project Z = Decision = Invest in (Project X/Project Z)Lewis Services is evaluating six investment opportunities (projects). The following table reflects each project's net present value NPV and the respective initial investments required. All of these projects are independent. Project NPV Investment 2,500 2,500 || 4,000 20,000 II 7,500 30,000 IV 8,000 40,000 V 2,000 10,000 VI 2,500 5,000 Lewis has an investment constraint of P50,000. Which combination of projects would represent the optimal investment that should be recommended to Lewis Services' management? O I, II, III, IV, V, and VI O I, III, V, and VI O I, II, III, V, and VI O I, III, and VICullumber Corp. management is evaluating two independent projects. The costs and expected cash flows are given in the following table. The cost of capital is 13.73 percent. Year 0 1 2 3 4 5 Project A - $287,839 109,300 109,300 109,300 109,300 109,300 Project B - $401,058 The NPV of project A is $ There is The IRR of Project A is a. Calculate the projects' NPV. (Enter negative amounts using negative sign e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525.) 138,190 Cullumber should choose 162,830 b. Calculate the projects' IRR. (Round answer to 2 decimal places, e.g. 15.25%.) Cullumber should choose 179,500 118,800 119,800 c. Which project should be chosen based on NPV? Based on IRR? Is there a conflict? and project B is $ % and Project B is will be accepted. ◆ based on NPV. based on IRR. between the NPV and IRR decisions. d. If you are the decision maker for the firm, which project or projects will be…