Assume that Cherry Valley's managers developed the following estimates concerning a planned expansion to its River Park Lodge (all numbers assumed): Number of additional skiers per day. Average number of days per year that weather conditions allow skiing at Cherry Valley.. Useful life of expansion (in years). Average cash spent by each skier per day $ Average variable cost of serving each skier per day. $ Cost of expansion.... $ Discount rate 122 158 9 237 138 8,500,000 14% 1. 2. Compute the average annual net cash inflow from the expansion. Compute the average annual operating income from the expansion. Compute the payback period. 3. 4. Compute the ARR. Print Done

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For the following cash flow, determine the benefit cost ratio at 6%. Is the project economically efficient? Year 0 10 20 Action Establish trees Forest health thinning Harvest of timber Cash Flow ($25,000) ($5,450) $90,000 6%

Required information [The following information applies to the questions displayed below.] Cardinal Company is considering a five-year project that would require a $2,800,000 investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 14%. The project would provide net operating income in each of five years as follows: Sales Variable expenses Contribution margin $ 2,845,000 1,109,000 1,736,000 Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs $ 799,000 Depreciation 560,000 Total fixed expenses 1,359,000 $ 377,000 Net operating income Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using table. 6. What is the project's internal rate of return? Project's internal rate of return %

he cash flows associated with a public works project in Buffalo, New York, are shown. Use the modified B/C ratio at a discount rate of 5% per year to determine the economic justification.   First cost, $ 30,000,000 AW of benefits, $/year 7,700,000 AW of disbenefits, $/year 1,700,000 M&O costs, $/year        1,525,000 Life of project, years 30   The modified B/C ratio is  . The project is economically         (Click to select) justified not justified  .

Using the following information find the project's cash flow.  Once you have that information find the NPV, PI and IRR.   Cost of new equipt     7,800,000     Installation costs     200,000                 Unit Sales Year Units sold         1             80,000         2           130,000         3           140,000         4             90,000         5             70,000                   Sales price per unit $300 in years 1-4, $250 in year 5     Variable cost per unit $225/unit         Annual fixed costs $225,000 in years 1-5                   Working capital requirements: Initial working capital requirement $100,000     Each year net working capital equal to 10% of the year's sales   All working capital terminated at the end of year 5               Depreciation Bonus depreciation method - all is taken in year 1   Income tax rate 21%         Required rate of return 12%

Maggie's Resorts expansion project to increase the number of bungalows on its property had the following information: Maggie's Resorts Initial Investment $7,954,000 Residual Value $1,046,000 Average annual cash inflow $1,257,900 Discount rate 10% Useful life of expansion in years 15

You are considering the following project. What is the NPV of the project? WACC of the project: 0.10 Revenue growth rate: 0.05 Tax rate: 0.40 Revenue for year 1: 13,000 Fixed costs for year 1: 3,000 variable costs (% of revenue): 0.30 project life: 3 years Economic life of equipment: 3 years Cost of equipment: 20,000 Salvage value of equipment: 4,000 Initial investment in net working capital: 2,000

Pharoah Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $901,000, and project B's cost is $1,268,100. Cash flows from both projects are given in the following table. Year Project A $86,212 1 2 3 4 313,562 427,594 285,552 Project B $586,212 413,277 231,199 What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.) Discounted payback period of project A Pharoah should choose Discounted payback period of project B Which will be accepted with a discount rate of 8 percent?