1.Assuming you are facing with making a decision on a large capital investment proposal. the capital investment amount is $ Estimated the study period is years .The annual revenue at the end of each year is $ and the estimated annual year-end expense is $. starting in year Assuming a market value at the end year is $ and the benchmark rate is 10%, please answer the following questions: 1.Please design this investment project to fill the proper number in blank space to let the project is feasible in economics( 2.To give the cash flow chart of the project(

1.Assuming you are facing with making a decision on a large capital investment proposal. the capital investment amount is $ Estimated the study period is years .The annual revenue at the end of each year is $ and the estimated annual year-end expense is $. starting in year Assuming a market value at the end year is $ and the benchmark rate is 10%, please answer the following questions: 1.Please design this investment project to fill the proper number in blank space to let the project is feasible in economics( 2.To give the cash flow chart of the project(

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 4CMA: Foster Manufacturing is analyzing a capital investment project that is forecast to produce the...

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Joliet Company is considering two alternative investments. The company requires an 18% return from its investments. Compute the IRR for both Projects and recommend one of them. For further instructions on internal rate of return in Excel, see Appendix C.
Foster Manufacturing is analyzing a capital investment project that is forecast to produce the following cash flows and net income: The payback period of this project will be: a. 2.5 years. b. 2.6 years. c. 3.0 years. d. 3.3 years.
Consider the following project-balance profiles for proposed investment projects: Now consider the following statements:Statement 1: For Project A, the cash flow at the end of year 2 is $100.Statement 2: The future value of Project C is $0.Statement 3: The interest rate used in the Project B balance calculationsis 25%.Which of the preceding statements is (are) correct?(a) Just statement 1.(b) Just statement 2.(c) Just statement 3.(d) All of them.
a) Calculate the payback period for each project. The maximum allowable payback period setby the company for all projects is 3 years. b) Calculate the net present value (NPV) for each project c) Calculate the profitability index (PI) for each project d) Calculate the internal rate of return (IRR) for each project. e) Based on the answer in (a) – (d), explain briefly which project should be accepted. f) If the project is independent project, how would your answer change in part (e) Note: I need only e,f no question answer. only e and f
Assuming you are facing with making a decision on a large capital investment proposal. the capital investment amount is $________,Estimated the study period is _____years .The annual revenue at the end of each year is $_______, and the estimated annual year-end expense is $______starting in year _____, Assuming a market value at the end year is $ ______, and the benchmark rate is 10%, please answer the following questions: 1.Please design this investment project to fill the proper number in blank space to let the project is feasible in economics
I need to know the Cash payback period for each project, the Net present value, the annual rate of return for each project and finally I need the projects ranked best to worse (1, 2, 3) on their cashpayback, net present value, and annual return. Finally I need to know which is the best project. Question 1 of 1 > E Pharoah Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Project Bono Project Edge Project Clayton Capital investment $172,000 $182,000 $202,000 Annual net income: Year 1 14,700 18,900 28,350 2 14,700 17,850 24,150 3 14,700 16,800 22,050 4 14,700 12.600 13,650 5 14,700 9,450 12,600 5 14,700 9,450 12,600 Total $73,500 $75,600 $100,800 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.)
a) Calculate the payback period for each project. The maximum allowable payback period setby the company for all projects is 3 years. b) Calculate the net present value (NPV) for each project c) Calculate the profitability index (PI) for each project d) Calculate the internal rate of return (IRR) for each project. e) Based on the answer in (a) – (d), explain briefly which project should be accepted. f) If the project is independent project, how would your answer change in part (e) Note: 1. I need only e,f no question answer. only e and f 2. No need excel formula
Jay is currently evaluating a project with the following estimated investment requirements ($ millions) by year (starting in year 0): investment year investment 0 11.2 1 16.6 2 15.8 3 11.3 4 18 The estimated revenues ($ millions) from the project, expected to begin at time 3, are given in the table below: \ investment year reveune 0 13.3 1 14 2 8.4 3 14.7 4 9.9 5 8.4 6 13.4 To account for the different risk characteristics throughout the project's life, Jay has determined that a hurdle rate of 24% should be used beginning at time 0, while 30% should be used beginning in period 5. Determine the NPV for the project. NPV =
Consider a project with initial investment of Birr 25,000 generating the following cash flows over 4 years. Year Project cash flow (Birr) 0 (25,000) 1 5,000 2 7,000 3 13,000 4 16,000 ii.1 Based on the above details compute the following: Internal Rate of Investment (IRR) Profitability Index (PI) ii.2 Do you accept this project for investment? Give reason for your answer.
Solve the following problems. Provide proper solutions. 1. Given the information below and 15 percent cost of capital: OUTFLOW Year1: P800,000 Year2: P800,000 Year3: P800,000 Year4: P800,000 Year5: P800,000 P2,500,000 INFLOWS (a) Compute the net present value. (b) Should the project be accepted? Why? -----
Do the following problems. You must show your work.c) Find the IRR and MIRR of the following project and make your decision. Assume that the project's cost of capital (or WACC) is 4%. Project X that costs $30 million is expected to generate $13m per year for 3 years. Is this project acceptable?
a) Project Panda requires an initial investment of $560,000. The project will generate $46,000 in 2 years. After that, the project will generate 108,000 at the end of each year until the end of year 13. Using this information answer parts i), i) and i) below: i) Write down the equation that can be used to find the internal rate of return (IRR) of the project. In your equation, you must use the annuity formulas when possible. Can you advise if the rate of return is higher or lower than 12%? Provide your reason by calculating the net present value (NPV) of the project, you must use the annuity formulas when possible. Calculate the payback period in years for Project Panda. Round your answer to 2 decimal places.