Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is considering the following contracts: a. What are the profitability indexes of the projects? b. What should Fabulous Fabricators do? a. What are the profitability indexes of the projects? The profitability index for contract A is (Round to two decimal places.) The profitability index for contract B is. (Round to two decimal places.) The profitability index for contract C is. (Round to two decimal places.) b. What should Fabulous Fabricators do? (Select the best choice below.) O A. Since the profitability index for C is the largest, it should choose C. O B. It should take the two projects with the highest profitability indexes: Cand A OC. Since it has the capacity to do both B and C and NPV8 + NPVC is greater than NPVA, it should do both B and C. O D. Since the NPV of A is the largest, it should choose A.

Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is considering the following contracts: a. What are the profitability indexes of the projects? b. What should Fabulous Fabricators do? a. What are the profitability indexes of the projects? The profitability index for contract A is (Round to two decimal places.) The profitability index for contract B is. (Round to two decimal places.) The profitability index for contract C is. (Round to two decimal places.) b. What should Fabulous Fabricators do? (Select the best choice below.) O A. Since the profitability index for C is the largest, it should choose C. O B. It should take the two projects with the highest profitability indexes: Cand A OC. Since it has the capacity to do both B and C and NPV8 + NPVC is greater than NPVA, it should do both B and C. O D. Since the NPV of A is the largest, it should choose A.

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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REQUIRED Use the information provided below to answer the following questions: 3.1. Calculate the Payback period for the HMC. 3.2. Calculate the Net Present Value for both the HMC and VMC. 3.3. Calculate the Internal Rate of Return (IRR) for the HMC and VMC. 3.4. Which configuration of the CNC machining centres should SMT purchase, if any? Motivate your answer by referring to the answers obtained in questions 3.3 and 3.4. INFORMATION Southern Manufacturing Tools Limited (SMT) is considering the purchase of a Computer Numerical Control (CNC) machining centre for its operations. Two configurations of the CNC machining centres are available: horizontal CNC machining centre (HMC) and vertical CNC machining centre (VMC). Both the HMC and VMC will require an initial investment of R10 000 000, will have a useful life of 7 years and a residual value of R1 500 000. SMT uses the straight-line method of depreciation. The expected net cash inflows of the VMC are expected to be R2 100 000…
Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is considering the following contracts: a. What are the profitability indexes of the projects? b. What should Fabulous Fabricators do? a. What are the profitability indexes of the projects? The profitability index for contract A is (Round to two decimal places.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) NPV Use of Facility Contract A $1.99 million 100% $0.96 million 50% $1.52 million 50% B с Print ACCES Done - X
PT Motor & Cars has data for the project of establishing a factory as follows:- Value of initial investment Rp1.000.000.000,-- The investment period is five years.- Revenue Rp250.000.000 (first year), Rp300.000.000 (second year), Rp300.000.000 (third year),Rp350.000.000 (fourth year) and Rp400.000.000 (fifth year)- Required rate of return for project is 10%Please calculate for Net Present Value (NPV), Discounted Payback Period, Profitability Index and Internal Rate of Return (IRR). Give your analysis whether the project is accept or reject?
Problem 3-13 Internal Growth Rate (LG3-6) Last year, Lakesha's Lounge Furniture Corporation had an ROA of 9.0 percent and a dividend payout ratio of 33 percent. What is the internal growth rate? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Internal growth rate 6.03 X %
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You are an employee of University Consultants, Limited, and have been given the following assignment. You are to present an investment analysis of a small retail income-producing property for sale to a potential investor. The asking price for the property is $1,360,000; rents are estimated at $174,080 during the first year and are expected to grow at 2.5 percent per year thereafter. Vacancies and collection losses are expected to be 10 percent of rents. Operating expenses will be 35 percent of effective gross income. A fully amortizing 70 percent loan can be obtained at 6 percent interest for 30 years (total annual payments will be monthly payments × 12). The property is expected to appreciate in value at 3 percent per year and is expected to be owned for five years and then sold. Required: a. What is the first-year debt coverage ratio? b. What is the terminal capitalization rate? c. What is the investor’s expected before-tax internal rate of return on equity invested (BTIRR)? d.…
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Answer the questions ASAP.
You are analyzing a property that popped up on CREXI. Real estate taxes and management services cost 42,362 and 31,563, respectfully. Other expenses are 15,369. If your company’s required return is 10%, what must the average annual rent be over the next five years for you to purchase the property at $400,000 and obtain that 10%? Expenses grow at 2.5% per year. A. 189,500 B. 198,400 C. 201,300 D. 192,700 E. 209,500
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