Calculate the Profitability Index for Project A A firm is considering the following mutually exclusive investment projects. Project A requires an initial outlay of $500 and will return $120 per year for the next seven years. Project B requires an initial outlay of $5,000 and will return $1,350 per year for the next five years. The required rate of return is 10%. Use th Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 1.1684 b 1.2973 с 1.3476 d 1.4786

Calculate the Profitability Index for Project A A firm is considering the following mutually exclusive investment projects. Project A requires an initial outlay of $500 and will return $120 per year for the next seven years. Project B requires an initial outlay of $5,000 and will return $1,350 per year for the next five years. The required rate of return is 10%. Use th Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 1.1684 b 1.2973 с 1.3476 d 1.4786

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Please answer this question in a comprehensive and detailed manner with step by step solution. Reject any form of excel's sheet answer format. Just do it manually.
The Michner Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (1) Cash Flow (II) 0 123 -$ 73,000 33,000 33,000 3 33,000 -$ 17,100 9,250 9,250 9,250 a-1.If the required return is 11 percent, what is the profitability index for both projects? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Project I Project II - If the company applies the profitability index decision rule, which project should the 2. firm accept? O Project I O Project II b- What is the NPV for both projects? (A negative answer should be indicated by a 1. minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Project I Project II
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A pharmaceutical company developed four investment plans. The initial investment and the corresponding annual cash flows of the four investment plans for consecutive 5 years are shown in the following Table Q1. Project Name I II III IV Initial Investment (OMR) 44000 62000 100000 109000 Annual Cash inflow (OMR) 10000 22000 27000 44000 Identify the best project and decide the ranking based on the following profitability methods. a) Average rate of return. b) Payback period. c) Net Present value with discounting rate at 8% d) Benefit to cost ratio with discounting rate at 11% e) Internal rate of return for range of suitable discounting rate please solve d and e or all
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The Michner Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (1) Cash Flow (II) -$ -$ 0 55,000 1 25,000 2 25,000 3 25,000 a-1. If the required return is 10 percent, what is the profitability index for both projects? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Project I Project II 18,900 10,150 10,150 10,150 a- If the company applies the profitability index decision rule, which project should the 2. firm accept? Project I O Project II Project I Project II 1. b- What is the NPV for both projects? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
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ABM 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 the succeeding years Discount rate - 14% a. NPV for the perio 2023 through 2029; b. Total NPV using manual computation; c. Total NPV using the Excel function; and d. IRR rate.
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Assume that you have started a manufacturing/Service Organization in UAE with a capital of $400,000-$900,000. You are free to assume / invest within the range of $ 400,000 - $ 900,000, depending on the size of the business. In this respect you need to assume cash flows for Six years and calculate the NPv of the project as well as show the demand and supply of your goods through linear applications and linear lines and find out the BEP of your business and take necessary actions on the basis of your results.

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