Assume the following information for a capital budgeting proposal with a five-year time horizon: Initial investment: Cost of equipment (zero salvage value) $ 560, 000 Annual revenues and costs: $ 300, 000 $ 130,000 $ 50,000 $ 40,000 Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket costs Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. If the company's discount rate is 12%, then the net present value for this Investment is closest to: Multiple Cholce $271,600. S171,600). $1271,600). $(91.350).

Assume the following information for a capital budgeting proposal with a five-year time horizon: Initial investment: Cost of equipment (zero salvage value) $ 560, 000 Annual revenues and costs: $ 300, 000 $ 130,000 $ 50,000 $ 40,000 Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket costs Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. If the company's discount rate is 12%, then the net present value for this Investment is closest to: Multiple Cholce $271,600. S171,600). $1271,600). $(91.350).

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 2PA

See similar textbooks

Similar questions

Assume the following information for a capital budgeting proposal with a five-year time horizon: Initial investment: Cost of equipment (zero salvage value) $ 500,000 Annual revenues and costs: $ 300,000 $ 130,000 $ 50,000 $ 40,000 Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket costs Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. If the company's discount rate is 12%, then the net present value for this investment is closest to: Multiple Choice $211,600. $(31,350). $(111,600). $(211,600).
Assume the following information for a capital budgeting proposal with a five-year time horizon: Initial investment: Cost of equipment (zero salvage value) $ 460,000 Annual revenues and costs: Sales revenues $ 300,000 Variable expenses $ 130,000 Depreciation expense $ 50,000 Fixed out-of-pocket costs $ 40,000 Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using the tables provided. This proposal’s internal rate of return is closest to:
Assume the following information for a capital budgeting proposal with a five-year time horizon: Initial investment: Cost of equipment (zero salvage value) $ 570,000 Annual revenues and costs: Sales revenues $ 300,000 Variable expenses $ 130,000 Depreciation expense $ 50,000 Fixed out-of-pocket costs $ 40,000 Click here to view Exhibit 14B-1 and Exhibit 14B-2 to determine the appropriate discount factor(s) using the tables provided. This proposal’s internal rate of return is closest to: Multiple Choice 4%. 9%. 2%. 7%.
Assume the followling Information for a capital budgeting proposal with a five-year time horizon: Initial investment: Cost of equipment (zero salvage value) $ 530, 000 Annual revenues and costs: $ 300,000 $ 130,000 $ 50,000 $ 40,000 Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket costs Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. This proposal's Internal rate of return is closest to: Multiple Choice 7%. 12%. 5%. 10%.
Assume the following information for a capital budgeting proposal with a five- year time horizon: Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket costs The payback period for this investment is closest to: Multiple Choice O O 2.71 years. 5.75 years. 3.54 years. 1.21 years. $ 460,000 $ 300,000 $ 130,000 $ 50,000 $ 40,000
Assume the following information for a capital budgeting proposal with a five-year time horizon: Initial investment: Cost of equipment (zero salvage value) $ 530,000 Annual revenues and costs: Sales revenues $ 300,000 Variable expenses $ 130,000 Depreciation expense $ 50,000 Fixed out-of-pocket costs $ 40,000 Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. If the company’s discount rate is 12%, then the net present value for this investment is closest to:
Given the following attributes of an investment project with a five-year life: investment outlay, year0, $5,000; after-tax cash inflows, year 1, $800; year 2, $900; year 3, $1,500; year 4, $1,800; and year5, $3,200. (a) Use the built-in NPV function of Excel to estimate the NPV of this project. Roundyour answer to the nearest whole dollar. Assume an after-tax discount rate of 12.0%. (b) Estimatethe payback period, in years, for this project under the assumption that cash inflows occur evenlythroughout the year. Round your answer to one 1 decimal place.
Assume the following information for a capital budgeting proposal with a five-year time horizon: Initial investment: Cost of equipment (zero salvage value) $ 590,000 Annual revenues and costs: Sales revenues $ 300,000 Variable expenses $ 130,000 Depreciation expense $ 50,000 Fixed out-of-pocket costs $ 40,000 This proposal’s simple rate of return is closest to: Multiple Choice 22%. 14%. 15%. 27%.
Assume that a company is considering a capital investment project with a four-year time horizon and the following cash flows: Cost of new equipment $ 210,000 Working capital required $ 50,000 Annual net cash inflows $ 100,000 Maintenance and repairs in third year $ 40,000 Salvage value of equipment in fourth year $ 30,000 Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. Assuming the company’s required rate of return is 12%, the profitability index of the project is closest to:
Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project Required: 1. Compute the profitability index for each investment proposal. Note: Round your answers to 2 decimal places. 2. Rank the proposals in terms of preference. Investment Profitability Proposal Index A B с D $ (150,000) 211,500 $ 61,500 Rank Preference 5 years Investment Proposal 6 $ (200,000) 275,600 $ 75,600 7 years $ (180,000) 274,100 $ 94,100 6 years D $ (2,600,000) 3,470,500 $ 870,500 6 years
Assume that a company Is consideringa capital Investment project with a four-year time horizon and the following cash flows: Cost of new equipment Working capital required Annual net cash inflows Maintenance and repairs in third year Salvage value of equipment in fourth year $ 210,000 $ 50,000 $ 100,000 $40,000 $ 35,000 Click here to vlew Exhlbit 14B-1 and Exhibit 14B-2, to determine the approprlate discount factor(s) using the tables provided. The working capital will be released at the end of the project and the company's required rate of return Is 17%. The net present value of the project Is closest to: Multiple Choice $34,830. $44.730. $(30,530). $60.730.
Given the following attributes of an investment project with a 5-year life and an after-tax discountrate of 12%, calculate both the IRR and MIRR of the project using the built-in functions in Excel:investment outlay, time 0, $5,000; after-tax cash inflows, year 1, $800; year 2, $900; year 3, $1,500;year 4, $1,800; and year 5, $3,200. What accounts for the difference in these two measures?