Consider the following investment projects for SDL Engineering. All of the projects have a three-year investment life: Project's Cash Flow ($) Time (n) Project A Project B Project C Project D -$1,500 -$1,200 $600 $800 $1,500 -$1,600 $1,800 $800 $2,500 -$3,100 $800 $1,900 $2,300 1 $3,000 a. Compute the net present worth of each project where interest is 9% b. Which project do you recommend based on the NPW? Other than the NPW, why else would you recommend this project? ( you will be using the same rate that was for part a for this part)
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- Consider the following investment projects for SDL Engineering. All of the projects have a three-year investment life: Project’s Cash Flow ($) Time (n) Project A Project B Project C Project D 0 -$1,500 -$1,200 -$1,600 -$3,000 1 0 $600 -$1,800 $800 2 0 $800 $800 $1,900 3 $3,000 $1,500 $2,500 $2,300 Compute the Net Present worth of each project where interest rate is 9%. Which project do you recommend based on the NPW? Other than the NPW, why else would you recommend this project? (you will be using the same rate that was for part A for this part. Calculate the IRR for each project Show all workings in excelInvestment required Present value of cash inflows - Net present value Life of the project. Internal rate of return 1 Required 1 $ (270,000) 336,140 $ 66,140 Project 6 years 18% Complete this question by entering your answers in the tabs below. Required 2 Compute the profitability index for each investment project. Note: Round your answers to 2 decimal places. Profitability Index 2 $ (450,000) 522,970 $ 72,970 Project Number 3 years 19% The net present values above have been computed using a 10% discount rate. Limited funds are available for investment, so the company can't accept all of the available projects. Required: 1. Compute the profitability index for each investment project. 2. Rank the four projects according to preference, in terms of net present value, profitability index, and internal rate of return. 3 $ (360,000) 433,400 $ 73,400 12 years. 14 $ (480,000) 567,270 $ 87,270 6 years 16%The following table contains information about four potential investment projects that Castle Corporation is considering. Payback Period Required Investment $ 900,000 $ 1,150,000 $ 1,400,000 $ 1,900,000 Project B с D Project Life 5 Required 1 ARR 39.00% 21.00% 22.50% 22.20% Complete this question by entering your answers in the tabs below. 1st preferred 2nd preferred 3rd preferred 4th preferred 3.6 4.8 4.5 2.5 Required: 1. Rank the four projects in order of preference under each method indicated by the headers: 2. Which method is the best for evaluating the investments? Profitability Index 2.19 1.98 1.61 1.56
- Homework, Chapter 26 Average Rate of Return The following data are accumulated by Watershed Inc. in evaluating two competing capital investment proposals: Project A Project z Amount of investment $80,000 $92,000 Useful life 4 years 7 years Estimated residual value Estimated total income over the useful life $8,800 $27,370 Determine the expected average rate of return for each project. Round your answers to one decimal place. Project A Project zU3 Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Capital investment Annual net income: Year 1 2 3 4 Total Project Bono $163,200 14,280 14,280 14,280 14,280 14,280 $71,400 Project Edge Project Clayton $178,500 $204,000 18,360 17,340 16,320 12,240 9,180 $73,440 27,540 23,460 21,420 13,260 12,240 $97,920 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash Flows occur evenly throughout the year.)Average Rate of Return The following data are accumulated by Watershed Inc. in evaluating two competing capital investment proposals: Amount of investment Useful life Estimated residual value Estimated total income over the useful life Project A Project Z $80,000 $64,000 4 years 9 years 0 0 $6,400 $20,160 Determine the expected average rate of return for each project. Round your answers to one decimal place. Project A Project Z Feedback Check My Work X % X %
- You are given the following estimated information about a proposed project: Investment cost $ 66,000 Annual cost $/Year 10,000 Salvage value 10,000 Economic life 6 years M.A.R.R 10% Answer questions 4 through 6 based on the above information 5- The future worth cost is closest to : Select one: a. $ 170,080 O b. $ 184,082 O c.$ 195,500 d. $ 165,000Average Rate of Return The following data are accumulated by Watershed Inc. in evaluating two competing capital investment proposals: Project A Project Z Amount of investment $60,000 $56,000 Useful life 4 years 9 years Estimated residual value 0 0 Estimated total income over the useful life $9,000 $25,200 Determine the expected average rate of return for each project. Round your answers to one decimal place. Project A % Project Z %Porter Company is analyzing two potential investments Initial investment Net cash flow: Year 1 Year 2 Year 3 Year 4 Project X Project Y $ 75,900 $ 64,000 26,000 26,000 26,000 4,400 28,000 28,000 20,000 If the company is using the payback period method, and it requires a payback of three years or less, which project(s) should be selected? 0
- Average rate of return The following data are accumulated by Patterson Inc. in evaluating two competing capital investment proposals: Amount of investment Useful life Estimated residual value Estimated total income over the useful life Project C Project T $24,000 $40,000 4 years 9 years 0 0 $3,120 $20,700 Determine the expected average rate of return for each project. Round your answers to one decimal place. Project C X % Project T X %The following data are accumulated by Watershed Inc. in evaluating two competing capital investment proposals: Project A Project Z Amount of investment $64,000 $84,000 Useful life 4 years 9 years Estimated residual value 0 0 Estimated total income over the useful life $8,960 $43,470 Determine the expected average rate of return for each project. Round your answers to one decimal place. Project A % Project Z %U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Project Bono Project Edge Project Clayton Capital investment $164,800 $180,250 $204,000 Annual net income: Year 1 14,420 18,540 27,810 14,420 17.510 23,690 3 14,420 16,480 21,630 14.420 12.360 13,390 5 14,420 9,270 12,360 Total $72,100 $74,160 $98,880 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) Click here to view the factor table. Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.) Project Bono years Project Edge years Project Clayton years eTextbook and Media Compute the net present value for each project. (Round answers to 0 decimal places, e.g. 125. If the net present value is negative, use either a negative sign preceding the number eg -45 or…