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3a. Determine the payback period for each project.
Note: No need excle formula, thank you
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- The Acme Widget Company is considering two mutually exclusive projects with the following after-tax net cash flows: Project A Project B Initial Outlay -$50,000 -$50,000 Inflow year 1 32,000 14,000 Inflow year 2 32,000 14,000 Inflow year 3 14,000 Inflow year 4 14,000 Inflow year 5 14,000 Inflow year 6 14,000 Project A has…Pound Industries is attempting to select the best of three mutually exclusive projects. The initial investment and after-tax cash inflows associated with these projects are shown in the following table Cash flows Project A Project B Project CInitial investment (CF0) $60,000 $100,000 $110,000Cash inflows (CFt), t = 1 to 5 $20,000 $ 31,500 $ 32,500 x. Calculate the payback period for each project.y. Calculate the net present value (NPV) of each project, assuming that the firm has a cost of capital equal to 13%.The Star company, is considering two mutually exclusive projects. The expected cash flow values for each project are as follows: Period 0 1 2 3 4 Project A ($2.000.000) 900.000 600.000 500.000 800.000 Project B ($2.000.000) 700.000 700.000 700.000 700.000 With the required rate of return for these projects at 15%, calculate: a. Payback Period (PB), Net Present Value (NPV) and Internal Rate of Return (IRR) for both projects. b. Which project would you choose? Describe your answer
- The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each Project has an initial after-tax cash outflow of $6,500 and has an expected life of 3 years. Annual project after-tax cash flows begin 1 year after the initial investment and are- Subject to the following probability distributions. Project A Project B Probability Cash Flows 0:2 27 Probability 0.2 VOU J Cash Flows TO $6,250 0.6 6,300 0.6. 19,000 0.2. 6,750 0.2 BPC has decided to evaluate the riskier project at 12%. and the less-risky project at 8% a) What is each project's expected annual after tax- Cush flow? Round your answers to the nearest cent. Project A: $ 200 BOLL Project B: I 5/07 Project B's standard deviation (013) is $6,185 and its coefficient of variation (CVB) is 0.80, What are the values of OA and CVA? Do not rand) intermediate calculations. Rand your answer for Standard deviation to the nearest cent and for coefficient of variation to two decimal places. σε: J CVA 6,500The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each project has an initial after-tax cash outflow of $6,500 and has an expected life of 3 years. Annual project after-tax cash flows begin 1 year after the initial investment and are subject to the following probability distributions: Project A Project B Probability Cash Flows Probability Cash Flows 0.2 $6,250 0.2 $ 0.6 6,500 0.6 6,500 0.2 6,750 0.2 19,000 BPC has decided to evaluate the riskier project at 11% and the less-risky project at 8%. a. What is each project's expected annual after-tax cash flow? Round your answers to the nearest cent. Project A: $ Project B: Project B's standard deviation (OB) is $6,185 and its coefficient of variation (CVB) is 0.80. What are the values of gg and CVA? Do not round intermediate calculations. Round your answer for standard deviation to the nearest cent and for coefficient of variation to two decimal places. OA: $ CVA:The UMCCED Technology is considering two genetic research projects. The required rate of return on these projects is 11%. The two projects provide the following set of after-tax net cash flows. Project AKU Project ENGKAU Initial outlay -RM50,000 -RM50,000 Inflow year 1 RM10,000 RM16,000 Inflow year 2 RM18,000 RM16,000 Inflow year 3 RM15,000 RM16,000 Inflow year 4 RM16,000 RM16,000 Inflow year 5 RM13,000 RM16,000 (a) Determine the payback period for each project. If the institute imposes a 3.5-year maximum acceptable payback period, which of these projects should be accepted? (b) Calculate the net present value (NPV) for each project. (c)Calculate profitability index (PI) for each project. (d)Calculate the internal rate of return (IRR) for project ENGKAU. (e)Based on the IRR given and your answers in part (b) and (c) above, explain…
- Tropical Candy Inc are considering two mutually-exclusive projects, A and B. Their cash flows are shown below. Both Project A and Project B have an estimated cost of capital of 10%. Cash flows will be realized at the end of each time period. Year, t Project A Cash Flow at time t Project B Cash Flow at time t 0 -1800 -600 1 110 660 2 263.78 72.6 3 133.1 53.24 4 1024.87 146.41 5 3221.02 1610.51 Calculate the NPV for each project. Which, if either, project should be accepted? Why? Are there other capital budgeting criteria? If yes, list at least one.for Question part (d) and (e) The UMCCED Technology is considering two genetic research projects. The required rate of return on these projects is 11%. The two projects provide the following set of after-tax net cash flows. Project AKU Project ENGKAU Initial outlay -RM50,000 -RM50,000 Inflow year 1 RM10,000 RM16,000 Inflow year 2 RM18,000 RM16,000 Inflow year 3 RM15,000 RM16,000 Inflow year 4 RM16,000 RM16,000 Inflow year 5 RM13,000 RM16,000 Required: (a)Determine the payback period for each project. If the institute imposes a 3.5-year maximum acceptable payback period, which of these projects should be accepted? *Both projects can be accepted because the payback period of both projects is lower than the maximum acceptable payback period of 3.5 years but project ENGKAU is more profitable because its payback period is lower than the…Pound Industries is attempting to select the best of three mutually exclusive projects. The initial investment and after-tax cash inflows associated with these projects are shown in the following table. Cash flows Project A Project B Project C Initial Investment (CFo) $60,000 $100,000 $110,000 Cash ınflows (CFt), t=1 to 5 20,000 31,500 32,500 a.Calculate the payback period for each project. b.Calculate the net present value (NPV) of each project, assuming that the firm has a cost of capital equal to 13%. c.Calculate the internal rate of return (IRR) for each project. d.Summarize the preferences dictated by each measure, and indicate which project you would recommend. Explain why.
- Consider two mutually exclusive projects – Project X and Project Y with identical initial outlays of RM90,000 and depreciable lives of 5 years. Project X is expected to produce free cash flows of RM32,787 each year. Project Y is expected to generate a single after-tax net cash flow of RM223,880 in year 5. The cost of capital is 15 percent. Required:(a) Calculate the net present value for each projectConsider two mutually exclusive projects – Project X and Project Y with identical initial outlays of RM90,000 and depreciable lives of 5 years. Project X is expected to produce free cash flows of RM32,787 each year. Project Y is expected to generate a single after-tax net cash flow of RM223,880 in year 5. The cost of capital is 15 percent. Required:(a) Calculate the net present value for each project (b) Determine the internal rate of return for each project.(c) Compute the payback period for each project. (d) In a situation where there is capital rationing, calculate the profitability index (PI) for both projects and rank them accordingly. Based on your PI calculations above, identify the problems you foresee in selecting one of the projects. Select the best project based on Capital Budgeting Valuation Techniques above.Wang Food Market, Inc. has given you the following information on the two mutually exclusive projects under consideration: Annual Cash Flows 1 Year Project A 0 (R30 000) 1 10 000 2 10 000 3 10 000 4 10 000 5 10 000 Project B (60 000) 20 000 20 000 20 000 20 000 20 000 Wang requires a 14 percent rate of return on projects of this nature. (a) Compute the internal rate of return on both projects. (4) (b) Compute the profitability index of both projects. (4) (c) Compute the payback period of both projects. (4) (d) Which of the two projects, if either, should Wang accept? Why? (4)
