Elite Apparel Inc. is considering two investment projects. The estimated net cash flows from each project are as follows: Year Plant Expansion Retail Store Expansion 1 $105,000   $88,000   2 86,000   103,000   3 74,000   71,000   4 67,000   49,000   5 21,000   42,000   Total $353,000   $353,000   Each project requires an investment of $191,000. A rate of 10% has been selected for the net present value analysis. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Required: 1a.  Compute the cash payback period for each project.   Cash Payback Period Plant Expansion   Retail Store Expansion   1b.  Compute the net present value. Use the present value of $1 table above. If required, round to the nearest dollar.   Plant Expansion Retail Store Expansion Total present value of net cash flow $fill in the blank 3 $fill in the blank 4 Less amount to be invested fill in the blank 5 fill in the blank 6 Net present value $fill in the blank 7 $fill in the blank 8 2.  Because of the timing of the receipt of the net cash flows, the   offers a higher  .

The management of FICSIT Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows:YearWind TurbinesBiofuel Equipment1$270,000$300,5002270,000300,5003270,000300,5004270,000300,500The wind turbines require an investment of $877,600, while the biofuel equipment requires an investment of $910,000. No residual value is expected from either project.Problem 2 Instructions a. Determine the internal rate of return for each project by:i. computing a present value factor for an annuity of $1 and ii. using the present value of an annuity of $1 table appearing in this chapter (Exhibit 5).

Turner Enterprises is analyzing a project that is expected to have annual cash flows of $46,400, $51,300 and -$15,200 for Years 1 to 3, respectively. The initial cash outlay is $65,900 and the discount rate is 12 percent. What is the modified IRR? O 16.98% O 17.77% 018.13% O 17.04% O 18.66%

The Iggy Company is considering three capital expenditure projects. Relevant data on each project are as follows:   Project A Investment -275,000             Year 1 $40,000             Year 2 56,000             Year 3 80,295             Year 4 90,400             Year 5 55,000             Year 6 50,000             Year 7 45,000             Year 8 32,000               Project B Investment -275,000 Year 1 $72,000 Year 2 50,000 Year 3 66,000 Year 4 72,000 Year 5 29,000 Year 6 35,000 Year 7 22,000 Year 8 36,000   Project C Investment -275,000 Year 1 $82,000 Year 2 75,000 Year 3 65,000 Year 4 55,000 Year 5 45,000 Year 6 35,000 Year 7 25,000 Year 8 15,000   Required: Compute the Payback Period for each project.…

Blossom Industries management is planning to replace some existing machinery in its plant. The cost of the new equipment and the resulting cash flows are shown in the accompanying table. The firm uses an 18 percent discount rate for projects like this. Should management go ahead with the project? Year   Cash Flow 0   -$2,970,000 1   787,610 2   869,600 3   1,030,500 4   1,125,360 5   1,354,000 What is the NPV of this project? (Enter negative amounts using negative sign e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525.) The NPV is $enter The NPV in dollars rounded to 0 decimal places  Should management go ahead with the project? The firm should select an option                                                           rejectaccept the project.

Social Circle Publications Inc. is considering two new magazine products. The estimated net cash flows from each product are as follow:   Year Sound Cellar Pro Gamer 1 65,000 70,000 2 60,000 55,000 3 25,000 35,000 4 25,000 30,000 5 45,000 30,000 Total 220,000 220,000   Each product requires an investment of $125,000. A rate of 10% has been selected for the net present value analysis. A. Calculate the payback period for the two products. B. Calculate the net present value for the two products.

Consider two mutually exclusive new product launch projects that Nagano Golf is considering. Assume that the discount rate for Nagano Golf is 17 percent Project A: Nagano NP-30. Professional clubs that will take an initial investment of $995,000 at time 0. Next five years (years 1-5) of sales will generate a consistent cash flow of $452,000 per year. Introduction of new product at year 6 will terminate further cash flows from this project. Project B. Nagano NX-20. High-end amateur clubs that will take an initial Investment of $730,000 at time 0. Cash flow at year 1 is $300,000. In each subsequent year, cash flow will grow at 10 percent per year. Introduction of new product at year 6 will terminate further cash flows from this project. Year SAWNTO 1 2 3 4 5 NP-30 -$995,000 452,000 452,000 452,000 452,000 452,000 NX-20 -$730,000 300,000 330,000 363,000 399, 300 439, 230 Complete the following table: (Do not round intermediate calculations. Round the "PI" answers to 3 decimal places and…

Jacob Inc. is considering a capital expansion project. The initial investment of undertaking this project is $188,500. This expansion project will last for five years. The net operating cash flows from the expansion project at the end of year 1, 2, 3, 4 and 5 are estimated to be $28,500, $38,780, $58,960, $77,680 and $95,380 respectively. Jacob has a weighted average cost of capital of 18%. What is the modified internal rate of return if Jacob undertakes this project. Assuming that the positive cash inflow from undertaking this project will be reinvested at the weighted average cost of capital.

There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $34,000 and is expected to generate the following cash flows:   First Year Second Year Third Year Total Alpha Project $32,000   $22,000     $5,000   $59,000 Beta Project 8,000   23,500     28,000   59,500 Present value and future values table: https://openstax.org/books/principles-managerial-accounting/pages/time-value-of-money A. If the discount rate is 12%, compute the NPV of each project. Round your present value factor to three decimal places and final answer to answer to 2 decimal places. Alpha Project $_________ Beta Project $________ B. Which project should be recommended. _____________

Consider the following projects, X and Y where the firm can only choose one. Project X costs $1500 and has cash flows of $678, $652, $347, $111, $54, $16 in each of the next 6 years. Project Y also costs $1500, and generates cash flows of $738, $693, $405 for the next 3 years, respectively. WACC=11%.Calculate the projects’ NPVs, IRRs, payback periods.