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Mendez Company has identified an investment project with the following cash flows. Cash Flow $ 1,330 1,300 Year 1 2 3 4 1,610 1,970 a. If the discount rate is 12 percent, what is the present value of these cash flows? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the present value at 15 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. C. What is the present value at 21 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. a. Present value at 12 percent b. Present value at 15 percent c. Present value at 21 percent $ 4,621.79

The Michner Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (1) Cash Flow (II) 0 -$ 71,000 -$ 17,300 1 33,000 9,350 2 33,000 9,350 3 33,000 9,350 a-1.If the required return is 12 percent, what is the profitability index for both projects? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Project I Project II a- If the company applies the profitability index decision rule, which project should the 2. firm accept? ○ Project I ○ Project II b- What is the NPV for both projects? (A negative answer should be indicated by a 1. minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Kwame Nkrumah University of Cape Coast, Legon spent GHS1.8 million to install solar panels atop a parking garage. These panels will have a capacity of 500 kw, have a life expectancy of 20 years and suppose the discount rate is 10%.a. If electricity can be purchased for costs of GHS0.10 per kwh, how many hours per year will the solar panels have to operate to make this project break even?b. If efficient systems operate for 2,400 hours per year, would the project break even?c. The university is seeking a grant to cover capital costs. How big of a grant would make this project worthwhile (to the university)?

dont use excel i will 5 upvotes. Assuming a firm’s weighted average cost of capital is 12%, what is the discounted payback period of the following project? Year Net Cash Flow 0 -$375,000 1 $200,000 2 $200,000 3 $350,000 Group of answer choices a. 2.40 years b. 2.15 years c. 2.21 years d. 1.88 years

Maria Bakery Company is considering two investments, both of which cost $8,000. The cash flows are as follows: Year 1 2 3 b.) $14,029 & $18,071 a.) 1 year & 1 year a.) What is the payback period for Project A & Project B? b.) What is the net present value (NPV) for Project A & Project B? Assume a cost of capital of 10%. Select the correct answers for parts (a) and (b). b.) none listed Project Cash Flows Project A $12,000 8,000 6,000 b.) $18,071 & $13,029 b.) $14,029 & $19,071 a.) none listed a.) 0.5 years & 0.8 years a.) 0.7 years & 0.8 years Project B $10,000 6,000 16,000

What is the discount factor after 3 years if the discount rate is 6% Question 4Answer a. 1.1 b. 0.84 c. 0.60 d. 0.79

recommend to SLB to increase capacity without any additional equipment or labour! 8. Greg Kopp, Acting Dean of Engineering, is considering competing proposals to establish joint programs with universities in Australia and Mexico. Students enrolled in each program would pay an additional fee to participate in these programs. Australia $105,000 $60,000 Mexico $185,000 $71,000 Investment Net Benefit 3 years Project Life 2 years With a hurdle rate (MARR) of 10%, calculate the net present value and external rate of return of the two investments. As Greg Kopp, which option would you recommend the Faculty of Engineering pursue? TOTAL

4. Here is the cash flows for Project A and Project B. Calculate the Net Present Values of Project A and Project B by using a discount rate of 40%. Year 1 2 3 st 4 5 SO 6 -400.000 30.000 110.000 400.000 100.000 130.000 30.000 Project A -400.000 -400.000 21.429 -378.571 56.122 -322.449 145.773 -176.676 26.031 -150.646 24.171 -126.474 3.984 -122.490 -400.000 300.000 250.000 180.000 20.000 40.000 10.000 Project B -400.000 214.286 127.551 65.598 5.206 7.437 1.328 -400.000 -185.714 -58.163 7.434 12.641 20.078 21.406

A snow cone machine at an ice cream shop costs $15,000. The machine is expected to generate profits of $2,500 each year of its 10 year useful life. At the end of the 10 years the machine will have a salvage value of zero. Within what interest rate range does the IRR fall? AM a. Less than 10% C. 12% to 14% b. 10% to 12% d. Greater than 14%

Given the following cash flows for project X and project Y, Year Project X Project Y 0 -55000 -100000 1 20000 15000 2 13500 17000 3 11000 19000 4 10000 25000 5 9000 30000 6 7500 35000   Calculate the NPV, IRR, MIRR and traditional payback period for each project, assuming a required rate of return of 7 percent If the projects are independent, which project(s) should be selected? If they are mutually exclusive, which project should be selected?

Compute the IRR static for Project E. The appropriate cost of capital is 7 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project E Time: 0 1 2 3 Cash flow -$3,300 $990 $960 $840 IRR Should the project be accepted or rejected? Rejected O Accepted 4 5 $620 $420

. Connor Corporation is considering two projects (see below). For your analysis, assume these projects are mutually exclusive with a required rate of return of 10%.     Project 1 Project 2 Initial investment $(465,000) $(700,000) Cash inflow Year 1 $510,000 $850,000   Compute the following for each project: NPV (net present value) PI (profitability index) IRR (internal rate of return)   Based on your analysis, answer the following questions :   Which is the best choice? Why? Which project should be selected and why? If the projects had the same IRR amounts but different NPV totals, then how would you know which project to select? Explain.

Assuming a firm’s weighted average cost of capital is 12%, what is the discounted payback period of the following project? Year Net Cash Flow 0 -$375,000 1 $200,000 2 $200,000 3 $350,000 Group of answer choices a. 2.40 years b. 2.15 years c. 2.21 years d. 1.88 years

QUESTION SEVEN A. Project A has a net present value of zero when the discount factor of 20% is used. How much return is the project earning? 3. If project A above is earning K150, 000 per year in perpetuity, what is the initial investment cost of the project? Company A expects to generate K150, 000 cash flows per year in perpetuity and the risk adjusted discount rate is 20%. What should be the certainty equivalent cash flows when the risk free rate is 10%

Situation4: Calculate the benefit cost ratio for a highway project with the following benefits and costs, The project life is 40 years, the interest rate is 10%, and the project's right of way is worth $5M in 40 years. $20M-----Construction Cost (includes acquiring right of way) $350K----Annual maintenance ---- --Repaving every 8 years. $1M------Annual value of lives saved (1 per year) $1.25M---Time savings for commercial traffic $20 0.25 hours 250,000 trips $3M-- hour trip year $1M------Time savings for commuter and recreational traffic/year $5 0.25 hours 800,000 trips hour Hint: Benefit cost ratio trip year Annual benefit costs/ Total cost

INTEREST, ANNUITY, DEPRECIATION, BREAK-EVEN ANALYSIS SITUATION1: Five hundred pesos (P500.00) is deposited monthly to an account earning 7% compounded monthly. (a) what is the amount of the deposit after five years? (b) if the monthly deposit after two years is increased to P1,000. What is the amount of the deposit after five years? (c) repeat question () if the interest is 18% compounded monthly? SITUATION2: Interpret the figure below: find (a) Present worth of all additional maintenance cost, (b) Present worth of all cost, (c) Equivalent uniform annual cost (EUAC). Note, EUAC is the sum of all expenses such as first cost, operation cost and other expenses. 0 1 2 3 4 5 6 7 8 9 10 11 12 20 Y 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5.15 1.5 1.5 Initial cost: P20M Annual maintenance: P1.5M *** 25 1,5 Additional Maintenance every 5 years: P3M Cost of money: 8.0% SITUATION3: Under the data collected from the office of Department of Transportation and DPWH over the last 5 years indicate that for…

Project A                   Project B                       Year                       Cash Flow                       Year                       Cash Flow                       0                       -1,000                       0                       -2,000                       1                       900                       1                       900                       2                       900                       2                       900                       3                       900                       3                       900                       4                       900                       4                       900                       5                         5                       900                       6                         6                       900                  If the discount rate is 12% and you have to choose between these two projects, what is the equivalent annual series of the best project? Question 4…

The following are the cash flows of two projects:   Year Project A Project B 0 $ (330 ) $ (330 ) 1   160     230   2   160     230   3   160     230   4   160             a. Calculate the NPV for both projects if the discount rate is 12%. (Do not round intermediate calculations. Round your answers to 2 decimal places.)           b. Suppose that you can choose only one of these projects. Which would you choose?   multiple choice Project B Project A Neither

3. The Ajax Corporation has the following set of projects available to it: PROJECT INVESTMENT EXPECTED RATE OF REQUIRED (SMILLIONS) RETURN (%) A 500 23.0 75 18.0 C 50 21.0 125 16.0 E 300 14.0 F 150 13.0 250 19.0 Ajax can raise funds with the following marginal costs: First $250 million 14.0% Next 250 million 15.5 Next 100 million 16.0 Next 250 million 16.5 Next 200 million 18.0 Next 200 million 21.0 Use the marginal cost and marginal revenue concepts developed in the chapter to derive an optimal capital budget for Ajax.

Question 3 Simpson Ltd is an engineering company and is currently considering whether to accept one of the two mutually exclusive investment projects, namely project Bart and project Liza. The following are the Net Cash Flows of these two projects: Year Initial Investment 123 456 Project Bart £ (525,000) 260,000 (50,000) 302,000 240,000 194,000 125,000 Project Lisa £ (330,000) 80,000 162,000 180,000 145,000 81,000 c) Calculate the Net Present Value (NPV) for project Bart and project Lisa and recommend which project the company should invest in (if any), giving your reasons. The cost of capital 10%. d) You are told that at a cost of capital of 28%, the NPV of Project Bart is -£34,109 and the NPV of Project Lisa is -£5,204. Use this information (and the answers to part (c)) to estimate the Internal Rate of Return (IRR) for both projects and explain how Simpson Ltd should interpret these findings.

10. Given that the discount rate is 11.5%, what is the equivalent uniform annual cash flow of the following stream of cash flows? YEAR 0 - P100,000 YEAR 1 - P200,000 YEAR 2 - P300,000 YEAR 3 - P135,000

A proposed project has the following costs and benefits.  Using linear interpolation,  the project’s discounted payback period (use i=10%) is _____________.   Year Costs Benefits 0 $4,000   1   $1,200 2   $1,200 3   1,000 4   1,000 5   3,000 6   2,000       A. 6.35 years   B. 5.82 years   C. 4.24 years   D. 3.37 years

A firm evaluates all of its projects by using the NPV decision rule. Cash Flow Year 0 -$ 26,000 1 19,000 2 3 12,000 8,000 a. At a required return of 30 percent, what is the NPV for this project? NPV b. At a required return of 37 percent, what is the NPV for this project? NPV

Two mutually exclusive projects are under consideration: Year Project A Project B -$5,200 -$7,500 1 2,800 1,000 2 2,800 2,500 3 2,800 4,000 4 2,800 5,500 5 2,800 7,000 Which project should be selected if the simple payback method is used to make the determination? Not enough information B; its payback period is longer O A; its payback period is shorter

Consider a project that will bring in upfront cash inflows for the first two yearsbut require paying some money to close the project in the third year. A0                                  A1                                              A2 $6500                         $4500                                       $13000 This is a simple borrowing project. Determine the borrowing rate of return

A medium size manufacturing company has a budget of $200,000 to invest on five different capital projects. Each has a six year life. Additional financial data for the five project opportunities are given below. Initial Cost $50K EUAB D.A.E O C. A. B A C.B. D P T A. C.E 12,160 Determine which projects should be funded. B $80K 18,368 C $30K 7,932 D $40K 8,652 E $60K 13,374

9. Your boss has just presented you with the summary (below) of project costs and annual revenues for a new product line. He asks you to determine whether this investment opportunity would be economically justifiable using PW method at MARR=10%. What will you present to your boss? Note: Signs represents the cash flow. Year                       Net Cash flow 0                           -450,000   1                            -42,500 2                            92,800 3                            386,000 4                            614,600 5                            -202,200

MY NOTES ASK YOUR TEACHER Derive the equation to compute the equivalent annual cost given the capital cost of a highway, such that A (A/P) x P, where A/P is the capital recovery factor. (Use the following as necessary: P for the present worth, i for the annual interest as a decimal number, and n for the number of years.) A= DACCICUCE 43 Compute the equivalent annual cost (in dollars) if the capital cost of a transportation project is $500,000, annual interest 9.8%, and n 30 years. (Enter your answer as a positive value.)

4. Consider the cash flows for the following two projects: n A B 0 -$32,000 -$39,950 1 $6,600 $7,950 2 $9,500 $7,900 3 $8,150 $6,750 4 $X $6,925 5 $8,050 $9,000 6 $5,500 $9,650 (a) For project A, find the value of X that makes the equivalent annual receipts equal the equivalent annual disbursement at i=8% (b) Would you accept project B at i=6% based on AE criterion?

The following mutually exclusive investment alternatives have been presented to you. The life of all alternatives is 10 years. The IRR for Alternative A is most nearly equal to what value? Choose the correct answer below. OA. 47 OB. 27 OC. 22 OD. 42 E. 37 Capital investment Annual expenses Annual revenues Market value at EOY 10 IRR A B C D E $55,000 $90,000 $40,000 $30,000 $70,000 29,000 40,000 24,000 14,000 35,000 50,000 52,000 38,000 27,000 45,000 11,000 15,000 11,000 10,000 15,000 ??? 7.4% 33.6% 42.5% 9.2% a APE APPL