Cash Flow Probability Estimate Assessment $ 4,800 6,300 7,500 (a) 20% 50% 30% $ 5,400 7,200 (b) 30% 50% 8,400 20% $(1,000) 3,000 5,000 (c) 10% 80% 10%
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A: profitability index = Present value of cashflow / initial investment
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A: The formula to compute profitability index:
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A: Let CFn = Cashflow in year n r = 12%
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A:
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A: Formulas:
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(Expected Cash Flows) For each of the following, determine the expected cash flows.
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- What is the project's MIRR? r = 10.00% 0 Year Cash flows O a. 22.51% O b. 11.75% O c. 17.21% O d. 14.81% O e. 15.65% -$875 1 $300 2 $320 3 $340 $360Net cash flow Present value at 20% Net present value (s thousands) Period 0 -13,100 1 2 3 4 5 6 7 -1,534 2,997 6,373 10,584 10,035 5,807 -13,100 -1,278 2,081 3,688 5,104 4,033 1,945 3,319 926 3,399 (sum of PVs) Restate the above net cash flows in real terms. Discount the restated cash flows at a real discount rate. Assume a 20% nominal rate and 10% expected inflation. NPV should be unchanged at +3,399, or $3,399,000. Note: Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in thousands rounded to the nearest whole number. Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Real Net Cash Flows NPV $ (13,100)Year Cash Flow $275.000 1 $35.00 2 S65,000 36 S25.000 $13500 $185.000 9-20 $245,000 Given the following cash flows and if MARR-24%? Ans xx What is the Simple Payback Period? Ans XX What is the Discounted Payback Penod? 01 7 8.
- Discount Rate 12% Investment Project Cash Flow Total Net Cash Flow Initial Investment $ (8,000) ? Year 1 $ 800 ? Year 2 $ 900 ? Year 3 $ 1,500 ? Year 4 $ 1,800 ? Year 5 $ 3,200 NPV of investment $ ? Estimated Payback Period ? Estimate the total net cash flows, NPV of Investment and Estimated Payback Period using the excel's formula.Year Cash Inflow1 14,0002 19,0003 31,0004 05 06 07 130,000 what is the future value of this cash flow at 3%, 11%, and 18% interest rates at the end of year 7Consider the following investment projects.Year (n) Net Cash FlowProject 1 Project 20 -$1,200 -$2,0001 600 1,5002 1,000 1,000IRR 19.65% 17.54%Determine the range of MARR where project 2 would be preferred over project 1.(a) MARR … 12.5%(b) 13% … MARR … 15%(c) 16% … MARR(d) Not enough information to determine
- What is the present value of the following cash flow stream at a rate of 9.0%? Years: 0 1 2 3 CFs: $650 $2,450 $3,175 $4,400 Group of answer choices $7,749.11 $8,967.65 $8,317.65 $10,866.57Clearcast Communications Inc. is considering allocating a limited amount of capital investment funds among four proposals. The amount of proposed investment, estimated operating income, and net cash flow for each proposal are as follows: Operating Income Net Cash Flow Investment Year Proposal A: $450,000 $ 30,000 1 $120,000 2 30,000 120,000 3 20,000 110,000 4 10,000 100,000 (30,000) $ 60,000 $ 60,000 40,000 60,000 $510,000 $100,000 Proposal B: $200,000 1 80,000 3 20,000 60,000 4 (10,000) 30,000 (20.000) $ 90,000 20.000 $290,000 (Continued)Internal rate of return and modified internal rate of return. Quark Industries has three potential projects, all with an initial cost of $2,100,000. Given the discount rate and the future cash flow of each project in the following table, E, what are the IRRS and MIRRS of the three projects for Quark Industries?
- Baltusrol Inc. has the following three investment opportunities. A P70,000 10,000 B Initial investment Initial working capital required Cash inflows by year: Year 1 P70,000 5,000 P70,000 8,000 P35,000 35,000 10,000 5,000 8,000 P83.000 P1,250 P35,000 10,000 45.000 20,000 2,000 P112.000 P10,000 P4,000 8,000 10,000 98,000 5.000 P125.000 P12,500 Year 2 Year 3 Year 4 Released working capital Total Average annual income Required: 1. Rank the investment opportunities in order of desirability using. A. Payback period. B. Average book rate of return (use average net book value of the investment as the denominator), and C. NPV using a 16% discount rate. 2. Determine the profitability index for each opportunity and rank the investments based on these values.4. The following details are provided by Doppler Company: Initial investment $2,020,000 12% Discount rate Yearly cash flows 1 $210,000 $414,000 $414,000 $414,000 $210,000 2 3 4 Present Value of $1: 10% 11% 12% 13% 0.893 0.797 1 0.909 0.901 0.885 0.826 0.812 0.783 3. 0.751 0.731 0.712 0.693 0.613 0.659 0.593 0.636 0.567 4 0.683 0.621 0.543 Calculate the NPV of the project.=NPV(B26,I27:R27)-B24 B26 = discount rate of 9% B24 = initial investment of $30m I27:R27 = yearly cash flows: what are the cash flows for each year?