An investment has the following annual cash flow1st year-Php50,0002nd year- Php 65.0003rd year - Php 45,0004th year Php 40.000Sth year - Php 40,000The current cost of the investment is Php700,000. The investment can be sold at the endof Sth year for Pho700,00. The entity can borrow funds for 10%.Requirement: Compute the following* Present Value of the Investmentb. Net present value of the investmentShow your solunons

ln Finance the Time value is considered to find out the present value and future value of cash flow.…

An investment has the following annual cash flow 1st year- Php50,000 2nd year- Php 65.000 3rd year - Php 45,000 4th year Php 40,000 Sth year- Php 40,000 The current cost of the investment is Php700,000. The investment can be sold at the es of Sth year for Pho700,00. The entity can borrow funds for 10%N. Requirement: Compute the following Present Value of the Investment b. Net present value of the investment

An investment has the following annual cash flow 1st year- Php50,000 2nd year- Php 65.000 3rd year - Php 45,000 4th year Php 40,000 Sth year- Php 40,000 The current cost of the investment is Php700,000. The investment can be sold at the es of Sth year for Pho700,00. The entity can borrow funds for 10%N. Requirement: Compute the following Present Value of the Investment b. Net present value of the investment

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Kumi Ltd is considering an investment in a project, which requires an immediate payment of GHS15,000, followed by a further investment of GHS5,400 at the end of the first year. The subsequent return phase net cash inflows are expected to arise at the end of the following years: Year 1 2 3 4 5 Cash inflow (GHS) 6,500 7,750 5,750 4,750 3,750 You are required to estimate the internal rate of return of this project assuming the company’s cost of capital is 16%.
Calculate Internal Rate of Return to the investor based on a sale of the project at 12/31/26 using a 6.75% Cap Rate as sale value and 2% closing costs. Assume minimum $10,000 working capital at end of every year. All other cash flow is Distributable to investor.
A project has the following cash flows set out below. What is the profitability index of this project if the relevant discount rate is 2 percent? Enter your final answer to two decimal places. Year Cash flow 0 -1,745 1 537 2 2,066 3 3,912
Kumi Ltd is considering an investment in a project, which requires an immediate payment of GHS15,000, followed by a further investment of GHS5,400 at the end of the first year. The subsequent return phase net cash inflows are expected to arise at the end of the following years:Year 1 2 3 4 5 cashflows (GHS) 6,500 7,750 5,750 4,750 3,750You are required to estimate the internal rate of return of this project assuming the company’s cost of capital of 16%.
Juliana is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $55,000 Net cash inflows from operations (per year for 10 years) 11,000 Disinvestment 0 a. Determine the payback period. Round your answer to one decimal place; for example, enter 1.4 for 1.44 or 1.5 for 1.45. Answer years For parts b. and c., round your answers to three decimal places if applicable. For example, enter 0.084 for 0.0844 or 0.085 for 0.0845. b. Determine the accounting rate of return on initial investment. Answer c. Determine the accounting rate of return on average investment.
A company is considering two mutually exclusive investments with a discount rate of 10%.The cash flows of the projects over time follows: Time Project A Project B 0 - RM300,000 - RM405,000 1 - RM387,000 RM134,000 2 - RM193,000 RM134,000 3 - RM100,000 RM134,000 4 RM600,000 RM134,000 5 RM600,000 RM134,000 6 RM850,000 RM134,000 7 - RM180,000 RM0 Question: The company does not want to issue new share capital or debentures to financethis project. Recommend three (3) appropriate financing methods for this project.Provide support for your recommendations.
A company is considering two mutually exclusive investments with a discount rate of 10%.The cash flows of the projects over time follows: Time Project A Project B 0 - RM300,000 - RM405,000 1 - RM387,000 RM134,000 2 - RM193,000 RM134,000 3 - RM100,000 RM134,000 4 RM600,000 RM134,000 5 RM600,000 RM134,000 6 RM850,000 RM134,000 7 - RM180,000 RM0 A. What is the Net Present Value (NPV) for each project? B. Since the projects are mutually exclusive, which project would you recommend?Justify your recommendation. C. Suppose that the projects are independent projects, which project (s) would yourecommend? Justify your recommendation.
Cannonier, Inc., has identified an investment project with the following cash flows: Year Cash Flow 1 $1,050 1,280 3 1,500 4 2,240 What is the future value at a discount rate of 13 percent?
A company is considering two mutually exclusive investments with a discount rate of 10%.The cash flows of the projects over time follows: Time Project A Project B 0 - RM300,000 - RM405,000 1 - RM387,000 RM134,000 2 - RM193,000 RM134,000 3 - RM100,000 RM134,000 4 RM600,000 RM134,000 5 RM600,000 RM134,000 6 RM850,000 RM134,000 7 - RM180,000 RM0 Net Present Value: Cash flows Discount rate at 10% PV of cash flows Time Project A Project B Project A Project B 0 -300,000 -405,000 1.0000 (300,000.00) (405,000.00) 1 -387,000 134,000 0.9091 (351,818.18) 121,818.18 2 -193,000 134,000 0.8264 (159,504.13) 110,743.80 3 -100,000 134,000 0.7513 (75,131.48) 100,676.18 4 600,000 134,000 0.6830 409,808.07 91,523.80 5 600,000 134,000 0.6209 372,552.79 83,203.46 6 850,000 134,000 0.5645 479,802.84 75,639.51…
A company is considering two mutually exclusive investments with a discount rate of 10%.The cash flows of the projects over time follows: Time Project A Project B 0 - RM300,000 - RM405,000 1 - RM387,000 RM134,000 2 - RM193,000 RM134,000 3 - RM100,000 RM134,000 4 RM600,000 RM134,000 5 RM600,000 RM134,000 6 RM850,000 RM134,000 7 - RM180,000 RM0 Net Present value given : Time Project A Project B Project A Project B 0 -300,000 -405,000 1.0000 (300,000.00) (405,000.00) 1 -387,000 134,000 0.9091 (351,818.18) 121,818.18 2 -193,000 134,000 0.8264 (159,504.13) 110,743.80 3 -100,000 134,000 0.7513 (75,131.48) 100,676.18 4 600,000 134,000 0.6830 409,808.07 91,523.80 5 600,000 134,000 0.6209 372,552.79 83,203.46 6 850,000 134,000 0.5645 479,802.84 75,639.51 7 -180,000 0 0.5132…
Park Company is considering an investment of $31,500 that provides net cash flows of $13,200 annually for four years. What is the investment's payback period? Numerator: 1 1 Payback Period Denominator: II II = II = Payback Period Payback period 0
The initial investment of a project is OMR 350,000 and its cash inflows are OMR 225,000 per year. In this case, the payback period of the project is: a. 0.642 yedrs b. 1.55 years c. None of these d. 4 years