Answered: Thorley Inc. is considering a project…

Thorley Inc. is considering a project that has the following cash flows: $1,125 outflow today, $500 in year 1, $5000 in year 2, $500 in year 3 and $800 in year 4. What is the projects payback?

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter26: Capital Investment Analysis

Section: Chapter Questions

Problem 4CMA

See similar textbooks

Related questions

Q: Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed…

A: The operating cash flow is calculated as revenues less expense net of taxes.

Q: The firm is considering a project with a net cost of investment of ₱4,000,000 can bring in the…

A: Payback Period The payback period refers to the method of calculating the time in which the initial…

Q: Taggart Inc. is considering a project that has the following cash flow data. What is the project's…

A: Payback period is the time it requires for the project to recover its cost. The method does not…

Q: McGlothin Inc. is considering a project that has the following cash flow data. What is the project's…

A: YEAR CASH FLOW 0 -1150 1 500 2 500 3 500

Q: The Smith Company is proposing to spend $3,195,400 on a project that has estimated net cash flows of…

A: Net present value (NPV) is the value of all the cash flow of the investment (positive and negative)…

Q: Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed…

A: Projected cash flows represent only the operational cash flows that are generated due to the…

Q: Green Cars Inc. is considering a project with the following expected cash flows. Year Cash Flow…

A: Payback period : When cash inflows are uneven we use Payback period = E + B/C Where, E = Year…

Q: Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed…

A: The cash generated by an organization from core business operations are called operating cash flows.…

Q: An analyst at Stoneville Corporation estimates that a project has the following after-tax net cash…

A: Capital budgeting is the process by which a corporation examines potential large projects or…

Q: Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed…

A: Sales=$25 millionOperating cost=$22.5 millionInterest expense=$3millionTax rate=25%

Q: Colsen Communications is trying to estimate the first-year net operating cash flow (at Year 1) for a…

A: The cash flow statement represents the cash inflow and cash outflow of the company due to operating,…

Q: OCF

A: Operating cash flow refers to the inflows and outflows of cash transactions that are related to…

Q: MHD is considering an expansion project that requires an initial outlay of OMR120,000. The project…

A: Required Return = 12% Depreciation expense each year = 10,000 Year Net Income Net operating Cash…

Q: Jasmine Manufacturing is considering a project that will require an initial investment of $52,000…

A: Formulas:

Q: Nashville's Kitchen Corp. is considering a proposed project with the following cash flows. If both…

A: MIRR = Future value of cash inflowPresent value of cash outflow1/n-1 Note: Alternatively we can…

Q: Susmel Inc. is considering a project that has the following cash flow data. The project's regular…

A: Introduction: Payback period: Usually, payback period is expressed in years, which takes a capital…

Q: XYZ Company is deciding whether or not they will push through with Project A, considering that they…

A: The capital investment decisions refer to the selection of the capital project based on the…

Q: Cannonier, Inc., has identified an investment project with the following cash flows: Year Cash Flow…

A: In this question we need to compute the future value after 4 years.

Q: Insigne Corporation is considering two investment projects (projects A and project B) that are…

A: We have the following data regarding outflows and inflows for the two projects:

Q: A company is trying to estimate the first-year cash flow (at Year 1) for a proposed project. The…

A: The cash flow of the project can be calculated as the after tax cash flow plus depreciation tax…

Q: Assuming that the project will yield exactly a 6% rate of return, what is the expected net cash…

A: Compute the cost saved.

Q: Radha Limited is evaluating a project whose expected cash flows are as follows. Year…

A: Cost of Capital = 10% Reinvestment Rate = 13% Year Cash Flow 0 -500,000 1 100,000 2 200,000…

Q: The Sampson Company is considering a project that requires an initial outlay of $75,000 and produces…

A: 1) Computation:

Q: If the cost of a project is $50,000 and the cash inflows are as given in the table below, what is…

A: given cost of project =$50000

Q: Findell Corporation is considering two projects, A and B, and it has gathered the following…

A: The present value index or profitability index is calculated as ratio of present value of cash…

Q: FB Company is considering investing in two construction projects, and he developed the following…

A: NPV is the difference of present value of cash inflows and cash outflows/Initial investment. A…

Q: Philnet Inc. is considering a project that has the following after-tax operating cash flows (in…

A: Year Project Cash Flows 0 -$300 1 125 2 75 3 200 4…

Q: indell Corporation is considering two projects, A and B, and it has gathered the following estimates…

A: Present value index represents the efficiency of a project under capital budgeting decisions.…

Q: Hello Mitty Ltd is considering a project MEA as shown below. The estimated cash flows for this…

A: NPV stands for Net Present Value, and it represents the positive and negative future cash flows…

Q: You are considering investing in a project that has an initial cost of $10,000, a WACC of 10%, with…

A: NPV = present value of future cashflows

Q: Al's Bistro is considering a project which will produce sales of $23,000 and increase cash expenses…

A: In top-down approach for ascertaining operating cash flows (OCF), sales is the starting point and…

Q: Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed…

A: Standard disclaimer “Since you have asked multiple questions, we will solve the first question for…

Q: If the project rate of return is 12% on its investments, should it accept this project? Why? Compute…

A: Capital budgeting is defined as the process through which any business evaluates major projects such…

Q: Colsen Communications is trying to estimate the first-year cashflow (at Year 1) for a proposed…

A: a. Calculate Cash flow for year 1 as below: Resultant table: Hence, Cash flow for Year 1 is $3.9…

Q: Johnson Sporting Goods is considering a project that will produce sales of $39,050 and have…

A: Sale 39050 Expenses 22700 Taxes 4000 Depreciation 2275 Cash outlay 1850

Q: Mansi Inc. is considering a project that has the following cash flow data. What is the project's…

A: The Payback Period is one of the capital budgeting techniques. It is defined as the number of years…

Q: projects payback? Year Cash flows 1 3 $300 -$500 $150 $200

A: Payback period is the time taken to recover the cost of the investment. The payback period does not…

Q: What is NPV for a project with the following cash flows: an initial cash out of $35,400 followed by…

A: Net present value is difference between present value of cash flow and initial investment.

Q: Chandler Corp. is expecting a new project to start producing cash flows, beginning at the end of…

A: Excel Spreadsheet: Excel Workings:

Q: olsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed…

A: Cash flow shows the cash inflow and cash outflow of the company.

Q: Cols Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed…

A: Following is the answer to the question

Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Thorley Inc. is considering a project that has the following cash flows: $1,125 outflow today, $500 in year 1, $5000 in year 2, $500 in year 3 and $800 in year 4. What is the projects payback?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

The management of Ryland International Is considering Investing in a new facility and the following cash flows are expected to result from the investment: A. What Is the payback period of this uneven cash flow? B. Does your answer change if year 6s cash inflow changes to $920,000?
Your company is planning to purchase a new log splitter for is lawn and garden business. The new splitter has an initial investment of $180,000. It is expected to generate $25,000 of annual cash flows, provide incremental cash revenues of $150,000, and incur incremental cash expenses of $100,000 annually. What is the payback period and accounting rate of return (ARR)?
Green Cars Inc. is considering a project with the following expected cash flows. Year Cash Flow 0 -$75,000 1 $18,500 2 $18,500 3 $18,500 4 $18,500 5 $12,500 6 $12,500 7 $12,500 8 $12,500 What is the payback period of this project?
ABC Company is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? Note that the company uses its WACC for the required rate of return. WACC: 10.00% Year 0 1 2 3 Cash flows -$950 $500 $500 $500
Taggart Inc. is considering a project that has the following cash flow data. What is the project's payback in years? Year 0 1 2 3 Cash flows -$1,175 $460 $460 $460 Please explain and provide calculations.
Taggart Inc. is considering a project that has the following cash flow data. What is the project's payback? Year Cash flows 1 1.30 years 2 1.42 years 3 1.48 years 4 1.57 years 5 1.04 years 0 -$650 1 $500 2 $500 3 $500
Molin Inc. is considering to a project that will have the following series of cash flow from assets (in $ million): Year Cash flow 0 -1,580.92 1 453 2 749 3 935 The required return for the project is 6%. Year Cash flow 0 -1,580.92 1 453 2 749 3 935 1. The required return for the project is 6%. 2. What is the project's profitability index? 3. What is the internal rate of return (IRR) for this project?
Resnick Inc. is considering a project that has the following cash flow data. What is the project's payback? Year Cash flows a. 2.38 years b. 1.97 years c. 2.26 years d. 2.61 years e. 2.42 years 0 -$475 1 $200 2 $200 3 $200
You are considering a project that has the following cash flow data. What is the project's payback? Year 0 1 2 3 Cash Flow -900 350 450 550 Group of answer choices 2.40 1.53 1.96 2.18 2.62
Living Colour Co. has a project available with the following cash flows: Year Cash Flow 0 −$35,550 1 7,880 2 9,450 3 13,350 4 15,490 5 10,160 If the required return for the project is 7.6 percent, what is the project's NPV?
Talent Inc. is considering a project that has the following cash flow and WACC data.WACC: 7%Year 0 1 2 3Cash flows -$1,600 $500 $600 $700 (1) What is the project's NPV?(2) What is the project's IRR?(3) What is the project's Payback Period?(4) What is the project's Discounted Payback Period?
CSY Bhd is considering a project that has the following cash flow data. What is the project's payback? Year : 0 1 2 3 4 5 Cash Flow: -RM1,000 RM 300 RM 310 RM 320 RM 330 RM 340