2. Assume a company is going to make an investment of $450,000 in a machine and the following are the cash flows that two different products would bring in years one through four. Option A                             Option B Product A                          Product B $190,000                             $150,000 190,000                                  180,000 60,000                                     60,000 20,000                                     70,000 Payback Period for Option A = ? years. Payback Period for Option B =  ? years. Round your Payback Period (PB) answer to two decimal places. (i.e. 12.34).  Which of the two options would you choose based on the payback method. Option ? . Please note: Your answer is either "A" or "B" - capital letter, no quotes.

7. Assume a company is going to make an investment of $300,000 in a machine and the following are the cash flows that two different products would bring in years one through four. The company's required rate of return is 12%. Option A                   Option B Product A                 Product B $190,000                    $150,000 190,000                      180,000 60,000                         60,000 20,000                         70,000 Using the appropriate EXCEL spreadsheet in the Chapter11 NPV IRR Analysis.xlsx Download Chapter11 NPV IRR Analysis.xlsx, answer the following questions: What is the NPV for Option A?  What is the NPV for Option B?  What is the IRR for Option A?  What is the IRR for Option B?  PLEASE NOTE #1: The dollar amounts will be with "$" and commas as needed and rounded to two decimal places (i.e. $12,345.67). Round your IRR answers, in percentage format, to two decimal places (i.e. 12.34%).  Given the above answers, which project should the…

13. The IBC Company is considering undertaking an investment that promises to have the following cash flows Period 0 is = -$100  Period 1 is= $150  Period 2 is = $50 Period 3 is = $50 If it waits a year, it can invest in an alternative (that is, mutually exclusive) investment that promises to pay Period 1 Period 2 Period 3 −$150 $250 $50 Assume a time value of money of 0.05. Which investment should the firm undertake? Use the present value method and the internal rate of return approaches. With the IRR approach, use the incremental cash flows.

Find the present worth at time 0 of the chrome plating costs shown in the cash flow diagram. Assume i = 10% per year.

You have the opportunity to invest in a project with the following cash flows.   Initial investment/Outlay today: $11,000. Cashflow back to you in 1 year $6000 Cashflow back to you in 2 years $5000 Scrap Value in 2 years $500 Assume interest rates are 5% in the 1 year and 7% in the 2 year. (tip: use the spreadsheet “NPV” from Moodle to helpin your calculations)   a. Calculate the NPV of the project (show formula/workings)? b. Should you invest in this project? Why ?

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 10 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3.0 and 3.5 years, respectively. Time: 0 1 2 3 4 5 Cash flow: -S 245,000 $ 66,800 $ 85,000 $ 142,000 $ 123,000 $ 82, 200 Use the Pl decision rule to evaluate this project. Note: Do not round intermediate calculations and round your final answer to 2 decimal places. Should it be accepted or rejected? (Click to select)

Q1/ Ipswich Corporation is considering an investment opportunity with the expected net cash inflows of $300,000 for four years. The residual value of the investment , at the end of four years, would be $70,000. The company uses a discount rate of 14\% and the initial investment is $290,000. Calculate the NPV of the investment.

12. The ABC Company is considering undertaking an investment that promises to have the following cash flows: period 0, −$50; period 1, $90. If the firm waits a year, it can invest in an alternative (that is, mutually exclusive) investment that promises to pay −$60 in period 1 and $100 in period 2. Assume a time value of money of 0.05. Which investment should the firm undertake? Use the net present value and the internal rate of return methods.

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 11 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3 and 3.5 years, respectively. Time: 0 1 2 3 4 5 Cash flow: −$ 235,000 $ 65,800 $ 84,000 $ 141,000 $ 122,000 $ 81,200 Use the NPV decision rule to evaluate this project.