A company has an investment opportunity costing Rs.1,20,000 with the cashflow after tax: Rs. 25,000, Rs. 30000, Rs. 35,000, Rs. 40,000 and Rs. 45,000 for the estimated life of 5 years. Evaluate the project by using Payback period, NPV and PI methods if required rate of return is 10%.

Q: A company is considering two mutually exclusive projects. Both require an initial cash outlay of Rs…

A: The Pay Back Period of the Project is the time period within which the project recovers its initial…

Q: depreciated on a straight-line basis. The before taxes cash flows expected to be generated by the…

A: The process through which a company evaluates possible big projects or investments is known as…

Q: Your company is considering making an investment in equipment that will cost $240,000. The equipment…

A: Payback period and the accounting rate of return are two different methods of capital budgeting.…

Q: NUBD Co. is planning to invest P40,000 in a three-year project. NUBD’s expected rate of return is…

A: Present value means the actual amount is adjusted with the interest rate so as to get the present…

Q: ears. The company's required rate of return is 10% and pays tax at a 35% rate. The projects with be…

A: Given information : Year Cash flows A  Cash flows B 0 -20000 -20000 1 4000 6600 2 4000 8300…

Q: a company is considering two mutually exclusive projects. Both require an initial cash outlay of…

A: Details under question:   Initial Investment = 20,000 each Required Return = 10% Tax Rate = 35%…

Q: Foster Manufacturing is analyzing a capital investment project that is forecast to produce the…

A:

Q: Gold Mining, Inc. is using the profitability index (PI) when evaluating projects. Gold Mining's cost…

A: PI = PV of cash inflows / Initial Cost

Q: A project’s after-tax operating cash flow is $200,000 per year, with operating costs of $100,000 and…

A: Annual sales revenue refers to the total amount received from selling the product. Operating cash…

Q: The management of Charlton Corporation is considering the purchase of a new machine costing…

A: Cash payback period = Initial investment/Net cash flow per year

Q: A capital investment of Php 508,000 on a project can produce an annual revenue of Php 383,000 for 5…

A: Capital investment = 508,000 Annual Revenue = 383,000 N = 5 years Salvage Value = 7% of capital…

Q: Super Company is planning to invest P 80,000 in a 3-year project. The internal rate of return (IRR)…

A: The sum over time of total cash received (inflow) from sales or loans less the total amount of money…

Q: A osed capital expenditure project involves purchasing and installing new equipment. The equipment…

A: Cash flows: These are the inflow & outflow of cash from a company or a project. It measures…

Q: You have been asked by MPAC Ltd to analyse two projects, Xand Y. Each project costs £1,000,000, and…

A: We will analyze these projects by calculating Net Present Value of each of the projects. Calculation…

Q: a. What should be your material cost for a project with MARR of 25% to make it into marginally…

A: A project is said to be viable if the sum of the present value of all cash flows is greater than…

Q: the implementation of a new system would have a payback period of 5 years while gaining Php 175,000…

A: 1)Payback period is a period which shows how much time a project takes to recover the initial…

Q: Answer each independent question, (a) through (e), below. a. Project D costs $10,000 and will…

A: book rate of return based on the average book value=Average net profit/Average investment…

Q: You are an engineer proposing a potential investment and your company requires you to develop a…

A: Here, Initial Investment is Php 500000 Annual Revenue is Php 100000 Annual Expenses is Php70000…

Q: Answer each independent question, (a) through (e), below.   a. Project A costs $10,000 and will…

A: Note: Given Question consists of multiple questions and no particular one question is being…

Q: a. Project B costs $10,000 and will generate after-tax cash inflows of $900 in year 1, $2,400 in…

A: A. Calculation of payback period (in years): 4 years (approx) End Of year cash inflows cash…

Q: An investment of P3M can be made in a business that will produce uniform annual revenue of P1.2M for…

A: Given data, Initial investment = P3M Annual income =P1.2M Salvage value =10% of the investment…

Q: What is the NPV of a 6-year project that costs $100,000, has annual revenues of $50,000 and costs of…

A: The NPV is the present value of the future net benefits less the initial costs.

Q: Innovation Company is thinking about marketing a new software product. Upfront costs to market and…

A: Net Present Value: As the name suggests, NPV (net present value) is the difference between cash…

Q: LMN Corporation is considering an investment that will cost Rs 100000 and have a useful life of 4…

A: Payback period is the capital budgeting technique which represent the years required to recover the…

Q: A company needs to decide if it will move forward with two new products that it is  evaluating.  The…

A: A method of capital budgeting that helps to evaluate the present worth of cash flow and a series of…

Q: What is the incremental after-tax operating cash flow (OCF)

A: Incremental sales = $2,400,000 Incremental expenses = $1,400,000 Tax rate = 32% Initial Investment =…

Q: A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the…

A: Year Cash flow 0 -25000 1 11000 2 17000 3 10000

Q: An investment of P10,000 can be made in project that will produce a uniform annual revenue of P6310…

A: The question is related to Annual Cost Method. In  this  method,  interest  on  the  original…

Q: Determine whether this investment is an attractive option for the company.

A: Net present value (NPV) of an alternative/project refers to the variance between the initial…

Q: Using excel: show equations  A investment of $400,000 in a machine produces before-tax net revenue…

A: The straight line depreciation technique reduces the value of an asset consistently over time until…

Q: A company is wondering whether to spend GH¢ 10,000,000 on an item of equipment in order to obtain…

A: a)  (i) Computation: Hence, the payback period is 3.67 years.

Q: A company is considering the purchase of a copier that costs RM 50,000. Assume the required rate of…

A: To open the "NPV function" window - MS-Excel --> Formulas --> Financials --> NPV. To open…

Q: and a cost of Rs. 100,000 generates revenue of Rs. 25,000 in year 1, Rs. 45,000 in year 2, and Rs.…

A: Net present value or NPV is excess of present value of cash inflows over present value of cash…

Q: Answer each independent question, (a) through (e), below. a. Project A costs $5,000 and will…

A: * As per Bartleby guideline, if question contains multiple question then answer first three only.…

Q: A startup company has a fixed capital investment of Ph 500,000 and minimum working capital. The…

A: return on investment = Average earning/Initial investment Payback period is the initial outflow…

Q: 1. An investment of P270, 000 can be made in a project that will produce a uniform annual revenue of…

A: Given, In this question we have to find the given payback period of the  investment.

Q: You have been tasked with recommending one of the two investment projects for acceptance by your…

A:

Q: (2) What is the book rate of return based on the average book value? (Round your answer to 2 decimal…

A: The difference between the current value of cash and the future value of cash is referred to as net…

Q: Your company is currently considering two investment projects. Each project requires an upfront…

A: Payback period is the number of years it takes to recover the investment.Here,A = Last period or…

Q: What is the payback period for this investment under the assumption that the cash inflows occur…

A: Payback Period: It is the period of a project in which it recovers its initial cost of investment.…

Q: A company is considering two mutually exclusive projects. Both require an initial cash outlay of…

A: Details and inputs under the question: Initial Investment = 20,000 each Required Return = 10% Tax…

Q: You have the opportunity to expand your business by purchasing new equipment for PhP159,000. The…

A: Payback period = Years before full recovery + (unrecovered cost at the start of the year/ cashflow…

Q: a minimum after-tax return of 8% on investment.  Project D costs $5,000 and will generate sales of…

A: The difference between the current value of cash and the future value of cash is referred to as net…

Q: Calculate the Net present value to determine is the company should invest in the following projects.…

A: The Net Present value is computed by determining the present value of the cash outflows and cash…

Q: X company provides spetialty manufacturing services to defence contractors located in the Seattle,…

A: To open the "NPV function" window - MS-Excel --> Formulas --> Financials --> NPV.

Q: What is the payback period (in years) for this investment assuming that the cash inflows occur…

A: Payback Period: It is the project's period in which it recovers its cost of initial outlay. Hence, a…

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.