Calculate the profitability index for project X. B. Calculate the profitability for project Y C. Using the NPV method combined with the PI aporoach, which project would you select? Use a discount rate of 13 perce
Q: Determine the proceeds of the sale on a six-year interest-bearing promissory note for $5,750 at 6.9%…
A: Future value of present amount With present value (PV), periodic interest rate (r) and total period…
Q: One university needs some maintenance. The owner of the university decides to deposit $400000 in an…
A: Present worth can be calculated as below Present worth = Cash flow / (1+r)^n It can also be…
Q: On September 1, the home mortgage balance was $159,000 for the home owned by Sam Richardson. The…
A: In case or Mortgage Interest is charges on the outstanding balance. we know that Installment…
Q: A firm has total interest charges of $10,000 per year, sates of $1 million, a tax rate of 40…
A: Times interest earned ratio or interest coverage ratio shows ability of the company in paying it's…
Q: er year, how much could you afford to spend for a higher quality heat exchanger so that these annual…
A: Present value of the the future cost considering the inflation and cost of capital would give the…
Q: Why is TIME the portfolio manager’s best friend?
A: Portfolio manager: Portfolio managers are specialists that manage investment portfolios in order to…
Q: Bugg Properties' expected EPS is $2.00, $2.50, and $4.00 for the next three years, respectively.…
A: The question is related to the Calculation of Book Value per Share and Residual Value for next 3…
Q: Explain a corporate bond.
A: A Bond refers to an instrument that represents the loan being made by the investor to the company…
Q: In December 2017, an American investor buys 1,000 shares in a Mexican company at a price of 500…
A: Total number of shares purchased are 1000 Purchase price is 500 pesos Selling price is 550 pesos…
Q: a) Find Kareem's monhly payment b) If Kareem pays the monthly payment for each month for the full…
A: Loan (mortgage) amortization schedule refers to a schedule which is prepared to shows the periodic…
Q: How is private placement beneficial?
A: Private Placement is also referred to as non-public offering.It refers to funding of securities…
Q: What is meant by securities exchange?
A: A stock exchange, usually known as a securities exchange. This is a market where the stockbrokers…
Q: 3. Compute for the following: Required: Payback period, payback reciprocal, accounting rate of…
A: The question is related to Capital Budgeting. 1. Payback Period is the length of time required to…
Q: Assume you have a student loan that you will pay off in 10 years. How much would you save an…
A: The question is related to refinancing the loan at lower interest rate which was originally financed…
Q: The boom in IPO activity has been mainly credited to the surge in SPACs (special purpose acquisition…
A: SPACs (special purpose acquisition vehicles) are known as blank check companies and such companies…
Q: You plan to deposit $4,000 today, $2,000 in one year and $4,000 in two years into an account earning…
A: Here, Deposit Amount today (D0) is $4,000 Deposit Amount in One Year (D1) is $2,000 Deposit Amount…
Q: Paying rent and insurance premiums are examples of an annuity due. Suppose you have to pay a monthly…
A: Given: Monthly rentals=$1,800 Annual interest rate=4% total number of months=24 Payments at the…
Q: Roller Inc. has just paid an annual dividend of $0.8. Analysts expect dividends to grow by 8% per…
A: Data given: D0= $0.8 For next 9 years , g=Growth=8% per year Beyond 9 year g= Growth = 1.5% per…
Q: (Bond valuation relationships) The 13-year, $1,000 par value bonds of Waco Industries pay 12…
A: Yield to maturity (YTM) on the bond is the arte of return which investors expect when they hold the…
Q: Given the following probability distributions for the stocks of Celtic plc and Rangers plc calculate…
A: Probability Celtic Rangers 20% 30% 15% 30% 10% 20% 30% -10% 5% 20% 20% 5%
Q: Use the Dupont identity to solve the following. The ABC Inc. has sales of $10,500, total assets of…
A: Solution: Dupont analysis is a measure to compute the firm’s Return in Equity (ROE). As per Dupont…
Q: A small company purchased a state-of-the-art copier machine in 2012 for $5,995. Five years later…
A: Copier Machine Price in 2012 = $5,995 Copier Machine Price after Five Years = $3,650
Q: The market price is $900 for a 15-year bond ($1,000 par value) that pays 9 percent annual…
A: Bonds: Bonds are the liabilities of the company which is issued to raise the funds required to…
Q: A bond with 20 years to maturity and a face value of $1000 pays semi-annual coupons at a rate of 9%…
A: Solution:- Bond price means the price at which the bond is currently trading in the market. Price of…
Q: The net price of an item after trade discounts of 15% and 8% was RM1,955. Find: a) the list price b)…
A: List Price can be calculated as per the formula given below List Price = Gross Price - Trade…
Q: 1. Corn is an essential commodity in a small Central American country and the government intends to…
A: Solution:- Subsidy means the benefit granted by the government by decreasing the price, while by…
Q: financial position
A: Financial reporting refers to the process of the documentation and communication of all the…
Q: Suppose the spot rate and the 90-day forward rate on the Brazilian real are 3.3054 and 3.3263,…
A: Given: Spot rate: 1$=3.3054 brazilian real 90 days forward rate=3.3263 brazilian real 3-month…
Q: A company has the following items for the fiscal year 2020: Revenue = 10 million Net income = 4…
A: Note: Since the Value of Stock Price per share is given in dollars, it has been assumed that the net…
Q: Inflation and interest rates) Assume the expected inflation rate is 4.4 percent. If the current…
A: Nominal interest rate is interest rate including the inflation and real interest rate.
Q: Question 13 According to MM propositions, at what debt-equity ratio the cost of equity should be the…
A: MM proposition II defines cost of equity . Any firm in a given risk class , the cost of equity is…
Q: Card
A: Discover refers to the customer credit card brand which is known for the purpose of cashback…
Q: carlos invests $6000 in a 24 month CD that has a 4.75 interest rate. use the formula to find how…
A: Solution:- When an amount is invested somewhere, it earns interest. The amount invested is called…
Q: Derive the formula
A: Future worth or Future value refers to the value of current asset at some future point of time on a…
Q: Choose the best option in terms of which sets of workers and equipment should be chosen. The project…
A:
Q: You are a risk-averse investor who is considering investing in one of two economies. The expected…
A: Expected return shows estimated return which can be received from the investment or securities.…
Q: Suppose a man took out a 30-year loan with an annual rate of 6% to put an addition on his house. His…
A: Loan year=30 years Interest=6% Computer cost =$ 1,500 Here,we need to find amount of interest paid…
Q: A couple plans to purchase a vacation home. The bank requires a 5% down payment on the $230,000…
A: Present Value of Ordinary Annuity refers to the concept which gives out the discounted or today's…
Q: 0% 5.4%
A: Bonds are intimately associated with the term "yield-to-maturity," which is stated as an annualized…
Q: Toy plc is expected to record earnings per share of £7.00 next year and is expected to maintain its…
A: We will use Dividend discount model for calculation of value of share. In Dividend discount model,…
Q: The current liabilities section of the statement of financial position of HOPE CORP. as of December…
A: Liabilities is that amount which includes the fund raised by the company from various sources like…
Q: H11. The expected yearly interest rate for a deposit account is r1 from year 1 to year 5, and is r2…
A: Solution:- When an amount is deposited somewhere, it earns interest on it. The amount initially…
Q: A woman invests $1,200 at a rate of 7%. Find the time in years that it takes her investment to…
A: Future Value refers to the value of the current asset or investment or of cash flows at a specified…
Q: An, Inc., plans to borrow $50,000 from a bank at 12% interest for new .recording equipment. Compute…
A: Given: Borrowing amount = $50,000 Interest rate =12% Years = 7
Q: A new car is going to cost the buyer R209 169,00. The buyer intends to make a down payment of R23…
A: Solution:- When a loan is taken, it can either be repaid as a lump sum payment or in installments.…
Q: Investor A buys a 20 year, 5% annual coupon bond, with an YTM = 6,5%, expecting to have a return…
A: YTM It is the internal rate of return on a bond when the bond is held till its maturity. A bond…
Q: Lashonda wants to buy a new house but needs money for the down payment. Her parents agree to lend…
A: Simple Interest Can be computed as below. Simple Interest = Principle X Rate of Interest X Time
Q: Hancock Corp has the following operating results and capital structure. The firm is contemplating…
A: Given, Proposed debt=60% of total asset Book value per share=$ 25 Interest rate=9% combined state…
Q: 14. Naga Company produces bottled grape juice. Grape juice concentrate is typically bought and sold…
A: An asset is referred as the resource, which are owned or controlled through the business or economic…
Q: Consider the following options, which have the same two-year maturity and are written on the same…
A: Options: Options are derivative instruments. There are two types of options: Call options that give…
A. Calculate the profitability index for project X.
B. Calculate the profitability for project Y
C. Using the NPV method combined with the PI aporoach, which project would you select? Use a discount rate of 13 percent
Step by step
Solved in 2 steps
- PROGRAMS SELF DEVELOPMENT E-LIBRARY 8. 6. 10 11 12 13 14 15 16 Your company wants to invest JD 10,000,000 in network, taking into consideration the below table Investment 10,000,000.00 Lifetime Annual Revenues in Yearl 2,000,000.00 2% Annual decline in revenues from Y2 30% Direct Cost % of revenues 15% OPEX % of revenues 7% Interest Discount rate/fWACC) COMyUSF My Home 4 CengageNOWv2 | Online teachin X + ngagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inpro.. to Determine the average rate of return for a project that is estimated to yield total income of $270,400 over 4 years, costs $615,000, and has a $61,000 residual value.Consider the following table illustrating the NPV of three different projects over various time periods, discounted at a rate of 5%. Which Project should be selected? (feel free to use Excel) Project $ Year 0 year 1 year 2 year 3 year 4 year 5 NPV 1 |-10.00 8.00 8.00 4.00 2.00 2.00 $discounted -10.00 2 |-5.00 12.00 2.00 $discounted -5.00 3 $ -6.00 11.00 2.00 2.00 1.00 $discounted -6.00 Project 3. Project 2. Project 1. O insufficient information to determine.
- eBook Show Me How Video Average Rate of Return The following data are accumulated by GreenApple Motors Inc. evaluating two competing capital investment proposals: Testing Equipment Diagnostic Software Amount of investment $40,000 $72,000 Useful life 4 years 5 years Estimated residual value $0 $0 Estimated total income over the useful life $5,200 $19,800 Determine the expected average rate of return for each proposal. If required, round to one decimal place. Testing Equipment fill in the blank 1 % Diagnostic Software fill in the blank 2 %Home Insert Draw Design Layout Mail ngs Review View Help A Paste Font Paragraph Styles Editing Dictate Editor Reuse Files do Clipboard N Styles S Voice Reuse Files Editor Problem Initial investment (II) = $6,500, TPP = 2.5 years, required rate of return (r) = 8% Year Operating cash flow 1 2,000 4,000 3 3,000 1. How much is payback period (PP)? Should the project be accepted or rejected? 2. How much is discounted payback period (DPP)? Should the project be accepted or rejected? 3. How much is net present value (NPV)? Should the project be accepted or rejected? 4. How much is internal rate of return (IRR)? Should the project be accepted or rejected? 5. How much is modified internal rate of return (MIRR)? Should the project be accepted or rejected? 5 736 words English (United States) O Focus 7:38 PM 4/13/2022INGT202502 202223 Saved to this PC V Animations 1 BIUS ab AV - Aa- Slide Show Record Review View Help Accessibility. Investigate $ R Font % 5 T AAAEE G 2A Search Paragraph Drawing DCF Example: A company is considering the launch of a new product: ■ Investment required in equipment: £150000; Project life cycle: 5 years, Value of equipment in year 6: £10000, Cash inflow as follows: . E W 6 Year 1 2 3 4 5 An existing product can be discontinued immediately or retained instead of the new product for five years. If retained a cash inflow of £12000 p.a would be expected. Discount rate (cost of capital) is 15% p.a. Calculate the expected net present value of the new product (NPV=£67,000) Advise the company whether to launch the new product or retain the existing one. (New product generates NPV = £67k + £10k equipment value at end; NPV of exisitng product = £40k - advise launch new product) 4 & H 7 * U 8 Text Direction Align Text Convert to SmartArt £000 60 62 65 70 70 11 M 9 JU K Shape Fill…
- Project X (Videotapes of the Weather Report) ($10,000 investment) Project Y (Slow-Motion Replays of Commercials) ($30,000 investment) Year Cash Flow Year Cash Flow 1 $5,000 1 $15,000 2 3,000 8,000 ........ 3 4,000 9,000 4 3,600 4 11,000 .. Compute the payback period (PB), net present value (NPV), internal rate of return (IRR), profitability index (PI) and excess of IRR over k. Assume k at 10%. Decide on which Project will you choose and why?Answer: 14996 Mark Aban laban lang. Bonus item: Kent Bautista O Photo Message Your company must ensure the safety of its work force. Two plans are being considered for the next 10 Mentorship B3 Tuesday Janine: Gandang gising, Mente years: (1) Install a high electrified fence around the property at a cost of $100,000. Maintenance and electricity would then cost $5,000 per year over the 10-year life of the fence. (2) Hire security guards at a cost of $25,000 paid at the end of each year. Because the company plans to build new headquarters with a "state of the art" security system in 10 years, the plan will be in effect only until that time. Your company's cost of capital is 15 percent for average-risk projects, and that rate is normally adjusted up or down by 2 Atty Ramil Lopez percentage points for high- and low-risk projects. Plan 1 is considered to be of low risk because its costs can be predicted quite accurately. Plan B, on the other hand, is a high-risk project because of the…Transitions Animations Slide Show Review an Internet location and might be unsafe. Click for more details. Question 8 O A View O In 2020, a Liberty Seated half dollar issued in 1890 was sold for $120,000. What was the rate of return on this investment? HOE Enable Editing 6900 F P Activate Windows. Moto P 1886 2 81% 8°C L2005PA 650024
- 6. Problem 11.06 (NPV) eBook Problem Walk-Through Your division is considering two projects with the following cash flows (in millions): 0 1 2 3 Project A -$31 $7 $12 $22 Project B -$19 $13 $6 $5 What are the projects' NPVs assuming the WACC is 5%? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. Project A: $ million Project B: $ million What are the projects' NPVs assuming the WACC is 10%? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. Project A: $ million Project B: $ million What are the projects' NPVs assuming the WACC is…6. Problem 11-06 (New-Project Analysis) eBook New-Project Analysis Problem Walk-Through The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,050,000, and it would cost another $20,500 to install it. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $613,000. The MACRS rates for the first three years are 0.3333, 0.4445, and 0.1481. The machine would require an increase in net working capital (inventory) of $19,000. The sprayer would not change revenues, but it is expected to save the firm $400,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 25%. (Ignore the half-year convention for the straight-line method.) Cash outflows, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest dollar. a. What is the Year-0 net cash flow? b. What are the net operating cash flows in Years 1, 2, and…pany has 15M st x pm/qa/wait/40630247/ Find lero Find study resources Browse Q Study Resources ✓ Textbook Solutions ashboard Earn your first $20 for withdrawal $2.00 Question: Sculls and Shells Corporation (S&S Corp.) is about to launch a new rowing boat. Depending on the success of the new product, S&S Corp. will have a value next year of $100M, $85M, or $50M. These outcomes are equally likely, and this risk is diversifiable. Suppose the risk- free rate is 5% and that, in the event of a default, 25% of the value of S&S assets will be lost to bankruptcy costs. If S&S's only obligation is a zero-coupon bond due next year, with a $90M face value next year, what is the market value of the bond today? Download Attachments image.png Accept Skip Do you want to answer this question? 8m 56s + Expert Tutors 10:20 PM