Consider the following investment project. Calculate the net future worth of this investment at 11% and determine the acceptability of the investment.QnAn0- $76,00027,50028,50020,70020,70026,000Single PaymentCompound PresentEqual Payment SeriesSinking PresentFundAmountWorthWorthFactorFactorFactorFactor(F/P, i, N)(P/F, i, N)(A/F, i, N)(P/A, i, N)1.11000.90091.00000.90091.23210.81160.47391.71251.36760.73120.29922.44371.51810.65870.21233.10241.68510.59350.16063.69591.87040.53460.12644.23052.07620.48170.10224.71222.30450.43390.08435.146192.55800.39090.07065.5370102.83940.35220.05985.8892The net future worth of this investment will be $ thousand.AWNIN1234567812345CompoundAmountFactor(F/A, i, N)1.00002.11003.34214.70976.22787.91299.783311.859414.164016.7220CapitalRecoveryFactor(A/P, i, N)1.11000.58390.40920.32230.27060.23640.21220.19430.18060.1698

Future value can be referred to as the value of an underlying asset or security at a future date.…

Consider the following investment project. Calculate the net future worth of this investment at 11% and determine the acceptability of the investment. n An 0 - $76,000 1 27,500 28,500 20,700 20,700 26,000 Single Payment Compound Present Equal Payment Series Sinking Present Fund Factor Amount Worth Worth Capital Recovery Factor Factor Factor Factor (F/P, i, N) (P/F, i, N) (A/F, i, N) (P/A, i, N) (A/P, i, N) 1.1100 0.9009 1.0000 0.9009 1.1100 1.2321 0.8116 0.4739 1.7125 0.5839 1.3676 0.7312 0.2992 2.4437 0.4092 1.5181 0.6587 0.2123 3.1024 0.3223 1.6851 0.5935 0.1606 3.6959 0.2706 1.8704 0.5346 0.1264 4.2305 0.2364 0.4817 0.1022 4.7122 0.2122 2.0762 2.3045 0.4339 0.0843 5.1461 0.1943 2.5580 0.3909 0.0706 5.5370 0.1806 10 2.8394 0.3522 0.0598 5.8892 0.1698 The net future worth of this investment will be $ thousand. GAWNIN 2 3 4 5 6789 2345 Compound Amount Factor (F/A, i, N) 1.0000 2.1100 3.3421 4.7097 6.2278 7.9129 9.7833 11.8594 14.1640 16.7220

Consider the following investment project. Calculate the net future worth of this investment at 11% and determine the acceptability of the investment. n An 0 - $76,000 1 27,500 28,500 20,700 20,700 26,000 Single Payment Compound Present Equal Payment Series Sinking Present Fund Factor Amount Worth Worth Capital Recovery Factor Factor Factor Factor (F/P, i, N) (P/F, i, N) (A/F, i, N) (P/A, i, N) (A/P, i, N) 1.1100 0.9009 1.0000 0.9009 1.1100 1.2321 0.8116 0.4739 1.7125 0.5839 1.3676 0.7312 0.2992 2.4437 0.4092 1.5181 0.6587 0.2123 3.1024 0.3223 1.6851 0.5935 0.1606 3.6959 0.2706 1.8704 0.5346 0.1264 4.2305 0.2364 0.4817 0.1022 4.7122 0.2122 2.0762 2.3045 0.4339 0.0843 5.1461 0.1943 2.5580 0.3909 0.0706 5.5370 0.1806 10 2.8394 0.3522 0.0598 5.8892 0.1698 The net future worth of this investment will be $ thousand. GAWNIN 2 3 4 5 6789 2345 Compound Amount Factor (F/A, i, N) 1.0000 2.1100 3.3421 4.7097 6.2278 7.9129 9.7833 11.8594 14.1640 16.7220

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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Calculate the HPR of the following investment, entered as a percentage (Example: if your answer is 14.5%, enter 14.5 and not 0.145) Period Cashflow 0 -14100 1 3300 2 3300 3 3100 4 2800
Consider the following two projects: Project Year o Year 1 Year 2 Year 3 Year 4 Discount Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Rate A - 100 40 50 60 N/A 0.1 в - 73 30 30 30 30 0.1 The net present value (NPV) of project B is closest to: O A. 24.3 O B. 55.2 O C. 27.6 O D. 22.1
11. IRR rule (S5.3) Consider the following two mutually exclusive projects: Cash flows ($) Project A B Co -50 -50 C₁ +60 0 C₂ +60 0 0 +140 Page 142 a. Calculate the NPV of each project for discount rates of 0%, 10%, and 20%. Plot these on a graph with NPV on the vertical axis and discount rate on the horizontal axis. b. What is the approximate IRR for each project? c. In what circumstances should the company accept project A? d. Calculate the NPV of the incremental investment (B – A) for discount rates of 0%, 10%, and 20%. Plot these on your graph. Show that the circumstances in which you would accept A are also those in which the IRR on the incremental investment is less than the opportunity cost of capital.
7. Consider the following table for the cash flows of an investment account: Time mm/dd/yy 01/01/2015 04/01/2015 08/01/2015 12/31/2015 Contribution -300 +2,000 (a) Calculate the TWRR and the DWRR of the fund. (b) Comment on the results. Fund value before contribution 1,000 500 250 2,800
Consider the following two mutually exclusive projects: Year Cash Flow (X) Cash Flow (Y) 0 -24,063 -24,063 1 10,320 12,063 2 10,900 9,360 3 10,800 10,400 Sketch the NPV profiles for X and Y over a range of discount rates from zero to 25 percent (take 0%, 5%, 10%, 15%, 20%, 25%). Calculate the IRR of the projects. What is the relationship between NPV and IRR for your values? What is the crossover rate for these two projects and what it indicates for your values? Note - answer all the parts of the question.
onsider the following cash flows: C0=-$42 C1=+$38 C2=+$38 C3=+$38 C4=-$76 a. Which two of the following rates are the IRRs of this project?
Calculate the APR of the following investment, entered as a percentage (Example: if your answer is 14.5%, enter 14.5 and not 0.145) Year Number Cashflow 0 -11000 1 3000 2 3500 3 2900 4 2800
Following projects, A and B are mutually exclusive. Use a discount rate of 7.6 percent to solve the following. Year 1 2. 3 4 5. Project A -11000 4000 3000 4000 4000 2000 Project B -15000 5000 4000 5000 7000 3000 Calculate the NPV and IRR, and select the project.
The cash flow streams for three alternative investment A, B, C and D are: Project Co Cash Flow (Tk.) C2 Cs C 55000 C3 C4 C6 A 230000 45000 65000 45000 75000 50000 B 290000 45000 90000 35000 95000 65000 55000 C 310000 75000 55000 60000 55000 65000 45000 D 350000 77000 75000 95000 85000 65000 Determine (i) Pay Back Period, (ii) NPV if the required rate of return is 11%, and (ii) IRR for the four alternatives.
Consider the following projects: Cash Flows ($) Co Project D E -11, 100 -21, 100 C₁ 22, 200 34,500 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 11%. a. Calculate the profitability index for each project. b-1. Calculate the profitability-index using the incremental cash flows. b-2. Which project should you choose?
Consider the following two projects: Projec Year 0 Year 1 Year 2 Year 3 Year 4 Cash Cash Cash Cash Cash Discount Flow Flow Flow Flow Flow Rate A -100 40 50 60 N/A 0.11 -73 30 30 30 30 0.11 The net present value (NPV) of project As closest to Select one: a. 51.2 b. 25.6 O c. 20.5 Od. 22.5
Consider cash flows for the following investment projects (MARR Q2. Suppose that projects are mutually exclusive. Which project would you select based on AE criterion? 15 %). Project A Project B -3500 ProjectC -3000 -4000 1 1400 1100 1500 2. 1650 1000 1500 1300 1000 1800 4 750 1000 1800

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