Compute the DIFFERENCE in before tax income between the two options
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- Suppose you sell a fixed asset for $112,000 when its book value is $112,000. If your company's marginal tax rate is 21 percent, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)? Multiple Choice $112,000 $0 $68,320 $34,720Suppose you sell a fixed asset for $85,000 when it's book value is $100,000. If your company's marginal tax rate is 21%, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)? Multiple Choice A. $67,150 B. $100,000 C. $88,150 D. $15,000A company is considering two projects. The discount rate is 10 percent, and the projects' cash flows would be: Years 1 3 Project A -$700 $500| $300 $100 Project B -$700 $100| $300 $600 a. Calculate the projects' NPVS and IRRS. b. If the two projects are independent, which project(s) should be chosen? с. If the two projects are mutually exclusive, which project should be chosen?
- Eddie Corporation is considering the following three investment projects (Ignore income taxes.): Project C $ 12,900 Project D $ 60,000 Project E $ 105,000 $ 16,080 $ 90,600 $ 124,910 Investment required Present value of cash inflows The profitability index of investment project D is closest to: Multiple Choice O 0.34 0.51 0.49 1.51Suppose the following two independent investment opportunities are available to a company. The appropriate discount rate is 8 percent. Year O 1 2 3 Project Alpha -$4,500 b. 2,300 2,200 1,450 a. Compute the profitability index for each of the two projects. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Project Alpha Project Beta Project Beta -$ 6,100 1,350 4,500 4,000 Profitability Index Which project(s), if either, should the company accept based on the profitability index rule? Project Alpha O Project Beta Neither project O Both projectsConsider the following two independent investment opportunities that are available to Lion, Inc. The appropriate discount rate is 11.7%. Project X Project Y Year 0 1 2 3 $-1,272 544 941 860 $-2.162 909 2,194 1,302 What is the Profitability Index of project Y? (Round answer to 2 decimal places. Do not round intermediate calculations)
- Better plc is comparing two mutually exclusive projects, whose details are given below.The company’s cost of capital is 12 per cent.Project A Project B£m £mYear 0 (150) (152)Year 1 40 80Year 2 50 80Year 3 60 50Year 4 60 40Year 5 80 30(a). Using the net present value method, which project should be accepted?(b). Using the internal rate of return method, which project should be accepted?(c). If the cost of capital increases to 20 per cent in year 5, would your advice change? Hello.i have the solution you send me but i am trying to understand where did you get the calculations for in the worknotes tabel. I did my own calculation but i dont get the same answer. For example for year 2 for project A you have 39.8597 How did you get to that without using the formula in excel. I need to write down the actual numbers. I got 22.3214 some im not sure how you got to that number. Can you help me please? Thank you0 No3. The Serrano Corporation is considering signing a 1-year contract with one of two computer-based marketing firms. Although one is more expensive, it offers a more extensive program and thus will provide higher after-tax net cash flows. Assume these two options are mutually exclusive and that the required rate of return is 12 percent. Given the following after-tax net cash flows: Year 0 1 Option A -$50,000 70,000 Option B -$100,000 130,000 a. Calculate the net present value. Calculate the profitability index. b. c. Calculate the internal rate of return. d. If there is no capital - rationing constraint, which project should be selected? If there is capital-rationing constraint, how should the decision be made?Better plc is comparing two mutually exclusive projects, whose details are given below.The company’s cost of capital is 12 per cent.Project A Project B£m £mYear 0 (150) (152)Year 1 40 80Year 2 50 80Year 3 60 50Year 4 60 40Year 5 80 30(a). Using the net present value method, which project should be accepted?(b). Using the internal rate of return method, which project should be accepted?(c). If the cost of capital increases to 20 per cent in year 5, would your advice change? Hello.i have the solution you send me but i am trying to understand where did you get the calculations for in the worknotes tabel. I still cant calculate the IRR.i really dont understand how to do it. Can you help me please by using the numbers in the tabel so i can understand what is that you are adding or taking away please? I know how to calculate the NPV but not the IRR. I have went over and over this IRR but i still dont understand how you calculate it using the pv and the npv.i dont wanna use excel.
- Better plc is comparing two mutually exclusive projects, whose details are given below.The company’s cost of capital is 12 per cent.Project A Project B£m £mYear 0 (150) (152)Year 1 40 80Year 2 50 80Year 3 60 50Year 4 60 40Year 5 80 30(a). Using the net present value method, which project should be accepted?(b). Using the internal rate of return method, which project should be accepted?(c). If the cost of capital increases to 20 per cent in year 5, would your advice change? Hello.i have the solution you send me but i am trying to understand where did you get the calculations for in the worknotes tabel. I still cant calculate the IRR.i really dont understand how to do it. Can you help me please by using the numbers in the tabel so i can understand what is that you are adding or taking away please? I know how to calculate the NPV but not the IRRBetter plc is comparing two mutually exclusive projects, whose details are given below.The company’s cost of capital is 12 per cent.Project A Project B£m £mYear 0 (150) (152)Year 1 40 80Year 2 50 80Year 3 60 50Year 4 60 40Year 5 80 30(a). Using the net present value method, which project should be accepted?(b). Using the internal rate of return method, which project should be accepted?(c). If the cost of capital increases to 20 per cent in year 5, would your advice change? Hello.i have the solution you send me but i am trying to understand where did you get the calculations for in the worknotes tabel. I did my own calculation but i dont get the same answer. Could you show mw the calculation but not in excel please, i need the calculation by formula manuallyBetter plc is comparing two mutually exclusive projects, whose details are given below.The company’s cost of capital is 12 per cent.Project A Project B£m £mYear 0 (150) (152)Year 1 40 80Year 2 50 80Year 3 60 50Year 4 60 40Year 5 80 30(a). Using the net present value method, which project should be accepted?(b). Using the internal rate of return method, which project should be accepted?(c). If the cost of capital increases to 20 per cent in year 5, would your advice change?
