9-16 Compute the (a) net present value, (b) internal rate of return (IRR), and (c) discountedpayback period (DPB) for each of the following projects. The firm's required rate of return is 14percent.YearProject AlphaProject Beta$2.20,000)S000,000)120,000120,000(80,000)120,000S55,000Which project(s) should be purchased if they are independent? Which project(s) should bepurchased it they are mutually exclusive?

9-16 Compute the (a) net present value, (b) internal rate of return (IRR), and (c) discounted payback period (DPB) for each of the following projects. The firm's required rate of return is 1- percent. Year Project Alpha Project Beta $270,000 S000,000 120,000 120,000 (30,000) 120,000 555,000 Which project(s) should be purchased if they are independent? Which project(s) should be purchased it they are mutually exclusive?

9-16 Compute the (a) net present value, (b) internal rate of return (IRR), and (c) discounted payback period (DPB) for each of the following projects. The firm's required rate of return is 1- percent. Year Project Alpha Project Beta $270,000 S000,000 120,000 120,000 (30,000) 120,000 555,000 Which project(s) should be purchased if they are independent? Which project(s) should be purchased it they are mutually exclusive?

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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Compute the (a) net present value, (b) internal rate of return (IRR), (c) modified internal rate of return (MIRR), and (d) discounted payback period (DPB) for each of the following projects. The firm’s required rate of return is 13 percent. Year Project AB Project LM Project UV 0 $(90,000) $(100,000) $ (96,500) 1 39,000 0 (55,000) 2 39,000 0 100,000 3 39,000 147,500 100,000 Which project(s) should be purchased if they are independent? Which project(s) should be purchased if they are mutually exclusive?
Assume a project has cash flows of -$54,300, $18,200, $37,300, and $14,300 for Years 0 to 3, respectively. What is the profitability index given a required return of 12.6 percent? 1.02 .95 .98 1.06 ☐ 1.00
Find internal rate of return of a project with an initial cost of $43,000, expected net cash inflows of $9,550 per year for 8 years, and a cost of capital of 9.35%. Round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer is .05718 or 5.718% round as 5.72. A. 15.64% B. 14.90% C. 13.70% D. 14.75% E. 11.17%
Find the NPV for the following project if the firm's WACC is 8%. Year Cash Flow 0 -18500 1 8,000 2 4,000 3 10,000 4 5,000
Find internal rate of return of a project with an initial cost of $43,000, expected net cash inflows of $9,550 per year for 8 years, and a cost of capital of 8.80%.Round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer is .05718 or 5.718% round as 5.72. Group of answer choices 13.70% 18.32% 17.13% 14.90% 14.15%
Using the below informtion answer: 5.1 Payback Period of Project Tan (expressed in years, months and days). 5.2 Net Present Value of Project Tan.5.3 Accounting Rate of Return on average investment of Project Tan (expressed to two decimal places). INFORMATIONThe management of Mastiff Enterprises has a choice between two projects viz. Project Cos and Project Tan, each ofwhich requires an initial investment of R2 500 000. The following information is presented to you: PROJECT COS PROJECT TANNet Profit Net ProfitYear R1 130 000 80 0002 130 000 180 0003 130 000 120 0004 130 000 220 0005 130 000 50 000A scrap value of R100 000 is expected for Project Tan only. The required rate of return is 15%. Depreciation is calculatedusing the straight-line method.
"The FIN340 Company has a WACC of 10% and is evaluating a project with the following projected annual cash flows: (Year 0 (Start of Project): $-13,100, Year 1: $2,300, Year 2: 5,100, Year 3: $7,400, Year 4: $1,050 - Calculate the Internal Rate of Return (IRR) for this project." 16.53% 1.21% 20.99% 8.17% 4.20%
use excel 8. A project’s cash flows are listed below. Assume the appropriate discount rate for this project is 14%. The profitability index for this project is closest to ________. Year Cash Flow 0 -8000 1 3200 2 3200 3 3200 4 3200 (a) 0.17 (b) 0.25 (c) 0.66 (d) 0.18
A project with the following cash flows received each year and with a required return of 8%.Initial Outlay = RM100Cash Flows: Year 1 = RM40Year 2 = RM50Year 3 = RM60 With the information given, compute: i. Discounted payback periodii. Net Present Value andiii. Profitability Index.
The Burb Corporation is evaluating the following project. The CFO has determined that the appropriate risk-adjusted discount rate is 12%. Calculate the payback period for the project. (Round to 3 decimals) Year CF 0 -40,000,000 1 4,000,000 2 20,000,000 3 20,000,000 4 11,000,000
Economics Q1) study period is 10 years. MARR=12% A В Capital 11000 16000 13000 18000 investment Annual cost Market value PW (12%) 250 300 400 100 1000 1300 1750 2000 -12090 -17276 ??? -17921 a) PW of alternative C equals b) The rejected alternatives are c) The first comparison in the incremental analysis should be A (?-?) d) Write down the equation of the IRR A (D-B) e) Rank order the alternatives from best to the worst (if any) f) Draw the cash flow diagram for A (C-A)
Most Company has an opportunity to invest in one of two new projects. Project Y requires a $350,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $350,000 investment for new machinery with a three-year life and no salvage value. The two projects yield the following predicted annual results. The company uses straight-line depreciation, and cash flows occur evenly throughout each year. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Project Y Project z $350,000 Sales Expenses Direct materials Direct labor Overhead including depreciation Selling and administrative expenses Total expenses $280,000 49,000 70,000 126,000 25,000 270,000 80,000 24,000 35,000 42,000 126,000 25,000 228,000 52,000 15,600 Pretax income Income taxes (30%) Net income $56,000 $ 36,400

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