The following data relate to two investment projects, only one of which may be selected: Initial capital expenditure Profit per year Year 1 Year 2 Year 3 Year 4 Expected resale value at end of year 4 Note: Project Luthuli R'000 Project Madiba R'000 45 000 45 000 22 500 9 000 18 000 9000 13 500 21 500 9 000 23 500 9 000 0 Note: Profit is calculated after deducting straight-line depreciation The cost of capital is 15% - Profit is calculated after deducting straight-line depreciation -The cost of capital is 15%

The following data relate to two investment projects, only one of which may be selected: Initial capital expenditure Profit per year Year 1 Year 2 Year 3 Year 4 Expected resale value at end of year 4 Note: Project Luthuli R'000 Project Madiba R'000 45 000 45 000 22 500 9 000 18 000 9000 13 500 21 500 9 000 23 500 9 000 0 Note: Profit is calculated after deducting straight-line depreciation The cost of capital is 15% - Profit is calculated after deducting straight-line depreciation -The cost of capital is 15%

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Use these data to compute for each (a) the NPV at discount rates of 10 and 5 percent, (b) the BCR at the same rates, and (c) the internal rate of return for each. Describe the facts about the projects that would dictate which criterion is appropriate, and indicate which project is preferable under each circumstance.
Compute the Profitability Index (PI) for each project? Project A Project B Profitability Index (PI) 5- In light of your answers above, suppose that these two projects might be mutually exclusive or independent. According to these two assumptions, fill in the blanks in the table below with the suitable answer: Points Investment Criteria If A and B are mutually exclusive, then I would select If A and B are independent, then I would select PBP NPV IRR PI
NOTE: JUST ANSWER 3. Accounting rate of return4. Profitability index
Subject:
Subject: acounting
The following information is available on two mutually exclusive projects. Project Year 0 Year 1 Year 2 Year 3 Year 4 A -$700 $200 $300 $400 $500 B -$700 $600 $300 $200 $100 If the required rate of return is 10%, which project should be selected using the net present value (NPV) method? Group of answer choices A B
Just need b-1, d-1, and e-1 answered.
Whispering Winds Company is considering a long-term investment project called ZIP. ZIP will require an investment of $130,000. It will have a useful life of four years and no salvage value. Annual cash inflows would increase by $81,000, and annual cash outflows would increase by $40,500. In addition, the company's required rate of return is 10% Click here to view the factor table (a) Calculate the net present value on this project. (If the answer is negative, use either a negative sign preceding the number eg-5,275 or parentheses es. (5,275), For calculation purposes, use 5 decimal places as displayed in the factor table provided, eg. 1.25124 and final answer to O decimal places, eg. 5,275) Net present value $ Identify whether the project should be accepted or rejected. The project should be (b) Q Search 458 PM
Please do not give solution in image format thanku
Put answer in table format Yokam Company is considering two alternative projects. Project 1 requires an initial investment of $560,000 and has a present value of cash flows of $2,200,000.0. Project 2 requires an initial investment of $5,000,000 and has a present value of cash flows of $7,000,000. 1. Compute the profitability index for each project.2. Based on the profitability index, which project should the company prefer?
Subject: accounting
Requirments (a) Calculate the, the Payback Period, and the net Present Value of for each project.b) For each of the above methods of project appraisal recommend which project should be taken up. c) Using all the information gathered from the above techniques which project would you recommend giving the reasons for this decision. d) Explain the uses, limitations and merits of the Payback Period compared to Net Present Value in investment appraisal.

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