Problem 2ABM Enterprise would like to evaluate/analyze an investment proposal.Given the following:Investment amount 450,000 (2022)Dividends / Revenue stream - 100,000 for the first year and an interval of 5,000 for thesucceeding yearsDiscount rate - 14%a. NPV for the perio 2023 through 2029;b. Total NPV using manual computation;c. Total NPV using the Excel function; andd. IRR rate.

Initial Investment = 450,000 Discount Rate = 14% Dividend / Revenue = 100,000 for 1st year and…

Answered: ABM Enterprise would like to…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 15.3.1P

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Use Table 8 to answer the next two questions. Assume the committed capital is $100, the management fee is 2.00%, and the carried interest is 20.00%. Year 2015 2016 2017 2018 2019 $5.40 What is the carried interest in 2019? Called-down Paid in capital Mgmt Fees $26 $31 $21 O $11.20 $9.12 $9.85 $10 $12 Table 8 Operating NAV before Carried NAV after Results Distributions Interest Distributions Distributions -$14 $6 $11 $41 $46 $5 $10
NPV Analysis; Sensitivity Analysis; Data Tables in Excel This assignment is designed tointroduce you to the preparation of both a one-variable and a two-variable Data Table in Excel. Suchtables are useful for conducting and reporting the results of a series of what-if analyses. Assume thata hypothetical 5-year investment would require a net investment outlay of $350,000 and would haveannual (after-tax) cash inflows of $100,000. Assume, too, that the company considering this investment uses a 10% discount rate (weighted-average cost of capital) for present-value calculations.Required1. Consult the specified online help file (Microsoft website) regarding the preparation of Data Tables. (Seefootnote 27.)2. Prepare a one-variable Data Table where you depict the NPV of the proposed investment at each of thefollowing discount rates: 8% to 12%, in increments of 0.5%. Round your answers to nearest whole dollar. 3. Prepare a two-variable Data Table where, in addition to the 10 discount rates…
Simple Investment Allocation Case: This year, 2022 ABM Company selected your team to manage their allotted budget amounting to 10 million pesos for investment diversification portfolio. Your team was assigned to handle the said account. What would you choose? Other investment assets or Alternatives to fixed income and equities
Calculate the APR of the following investment, entered as a percentage (Example: if your answer is 14.5%, enter 14.5 and not 0.145) Year Number Cashflow 0 -11000 1 3000 2 3500 3 2900 4 2800
Net present value method, present value index, and analysis for a service company First United Bank Inc. is evaluating three capital investment projects by using the net present value method. Relevant data related to the projects are summarized as follows: Instructions 1. Assuming that the desired rate of return is 15%, prepare a net present value analysis for each project. Use the present value table appearing in Exhibit 2 of this chapter. 2. Determine a present value index for each project. (Round to two decimal places.) 3. Which project offers the largest amount of present value per dollar of investment? Explain.
Calculate the EAR of the following investment, entered as a percentage (Example: if your answer is 0.145, enter 14.5) Year Number Cashflow 0 -11400 1 3500 2 3000 3 3100 4 2800 Your Answer:
Calculate the internal rates of return of the following investment: Net investment -$1,100 Year 0 Net cash flows +6,500 Year 1 -11,400 Year 2 +6,000 Year 3 Round your answers to the nearest whole number and enter them in ascending order. IRR1: 0% IRR2: % IRR3: %
Please help answer From Question 3.1 to 3.5 REQUIREDStudy the information provided below and calculate the following:3.1 Payback Period of Project A (answer expressed in years, months and days). 3.2 Accounting Rate of Return (on average investment) of Project B (answer expressed totwo decimal places).3.3 Net Present Value of both projets (amounts rounded off to the nearest Rand). 3.4 Benefit Cost Ratio of Project A (answer expressed to three decimal places). 3.5 Internal Rate of Return of Project B (answer expressed to two decimal places). INFORMATIONThe following information relates to two possible capital expenditure projects being considered by EdamLtd. Because of capital rationing, only one project can be accepted.Project A Project BInitial cost R800 000 R800 000Expected useful life 5 years 5 yearsAverage annual profit R80 000 R80 000Expected net cash inflows: R RYear 1 240 000 240 000Year 2 260 000 240 000Year 3 280 000 240 000Year 4 220 000 240 000Year 5 200 000 240 000The…
Internal Rate of Return Method The internal rate of return method is used by Royston Construction Co. in analyzing a capital expenditure proposal that involves an investment of $ 132, 620 and annual net cash flows of $36,000 for each of the six years of its useful life. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Open spreadsheet Determine the internal rate of return for the proposal. % eBook Show Me How Office 365 Internal Rate of Return Method years of its useful life. x Open spreadsheet Determine the internal rate of return for the proposal.
b) Following data relate to five independent investment projects : Initial Outlay Projects P ORST 1,000,000 240,000 184,000 11,500 80,000 Annual Cash Inflows Life in Years 250,000 24,000 30,000 4,000 12,000 8 15 20 5 10 Page 2 of 3 Assume a 10% required rate of return and a 50% tax rate. Rank these five investment projects according to each of the following criteria: (i) Pay-back Period. (ii) Accounting Rate of Return. (iii) Net Present Value Index. (iv) Internal Rate of Return.
There are two proposals of investment, the estimated financial data related to these proposal as following Proposal A Proposal B Initial Investment $350000 $180000 Cash Inflow: year 1 $100000 $50000 Year 2 $120000 $50000 Year 3 $150000 $50000 Year 4 $90000 $50000 Year 5 $30000 $50000 Required Rate on return (RRR) 10% 10% All payment of inflows is at the end of accounting period while investment is paid at beginning of period, straight line method of depreciation is used Answer Below Questions Profitability index of Proposal B Answer 1 Payback period in years and months of Proposal B Answer 2 Rank the proposals based on Lowest Payback Period Answer 3 Profitability index of Proposal A Answer 4 Simple Rate on Return of Proposal A Answer 5 Payback period in years and months of proposal A Answer 6 Internal Rate on Return of Proposal B (IRR) Answer 7 PV…
Use Table 8 to answer the next two questions. Assume the committed capital is $100, the management fee is 2.00%, and the carried interest is 20.00%. Year Called-down Paid in capital Mgmt Fees $26 $31 $21 $10 $12 2015 2016 2017 2018 2019 What is the carried interest in 2019? O $9.85 O $5.40 $9.12 4 O $11.20 Table 8 Operating NAV before Carried NAV after Results Distributions Interest Distributions Distributions -$14 $6 $11 $41 $46 $5 $10 है

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