firm undertakes a five-year project that requires an initial capital investment of $125,000. The project is then expected to provide cash flow of $15,000 per year for the first two years, $55,000 in the third and fourth years, and $16,000 in the fifth year. The project has an end-of-life salvage value of $7,000.

SKIG Ltd, a construction company, is considering the selection of one from two mutually exclusive investments projects, each with an estimated 5-year life. Project Y costs K1, 616,000 and is forecast to generate annual cashflows of K500, 000. Its estimated residual value after five years is K301, 000. Project Z, costing K556, 000 and with a scrap value of K56, 000, should generate annual cashflows of K200, 000. The company operates a straight-line depreciation policy and discounts cashflows at 15%. Calculate the payback, ARR, NPV and IRR for each project and discuss which seems to be the better investment opportunity.

A project will require $512,000 for fixed assets and $47,000 for net working capital. The fixed assets will be depreciated straight-line to a zero-book value over the six-year life of the project. No bonus depreciation will be taken. At the end of the project, the fixed assets will be worthless. The net working capital returns to its original level at the end of the project. The project is expected to generate annual sales of $965,000 and costs of $508,000. The tax rate is 21 percent, and the required rate of return is 14.7 percent. What is the amount of the annual operating cash flow? O $283,633.33 O $447,826.67 $378,950.00 $245,300.00 $198,300.00

A Company is considering an investment proposal, involving an initial cash outlay of TZS 450,000. The proposal has an expected life of 7 years and zero salvage value. At a required rate of return of 12 percent, the proposal has a profitability index of 1.182. Required: Calculate annual cash inflows.

Amalgamated Industries is considering a 4- year project. The project is expected to generate operating cash flows of $11 million, $14 million, $16 million, and $9 million over the four years, respectively. It will require initial capital expenditures of $41 million dollars and an intitial investment in NWC of $24 million. The firm expects to generate a $11 million after tax salvage value from the sale of equipment when the project ends, and it expects to recover 100% of its nwc investments. Assuming the firm requires a return of 10% for projects of this risk level, what is the project's IRR?   Question 3 options:   9.59%   9.22%   8.95%   9.41%   9.69%

Keene, Inc. is considering a new five-year expansion project that requires an initial fixed asset investment of $3.0 million. The fixed asset will be depreciated using on a straight-line basis to zero over its five year life. The fixed asset will have a market value of $350,000 at the end of the project. The project requires an initial investment in net working capital of $325,000. The working capital will be recovered at the end of the project’s life. The project is estimated to generate $2,250,000 in annual sales, with costs of $750,000.  The tax rate is 35 percent. What is the free cash flow in year 1 (FCF1) on this project?   a. $1,575,000   b. $975,000   c. $900,000   d. $1,500,000   e. $1,185,000

Amalgamated Industries is considering a 4- year project. The project is expected to generate operating cash flows of $3 million, $16 million, $18 million, and $14 million over the four years, respectively. It will require initial capital expenditures of $35 million dollars and an initial investment in NWC of $6 million. The firm expects to generate a $6 million after tax salvage value from the sale of equipment when the project ends, and it expects to recover 100% of its nw investments. Assuming the firm requires a return of 15% for projects of this risk level, what is the project's IRR?   A. 16.16% B. 16.47% C. 15.39% D. 16.00% E. 15.70%

A project will produce an operating cash flow of $18,000 a year for 8 years. The initial fixed asset investment in the project will be $75,000. The net aftertax salvage value is estimated at $11,250 and will be received during the last year of the project's life. What is the IRR?   A. 18.57% B. 16.71% C. 17.08% D. 18.94% E. 17.83%

A project requires a $2,880,000 initial investment for new machinery with a five-year life and a salvage value of $316,000. The project is expected to yield annual income of $207,740 per year and net cash flows of $708,000 per year for the next five years. The project's accounting rate of return is: Multiple Choice 23.9%. 6.8%. 13.0%. 19.8%. 47.0%.

A company is considering a new 6-year project that will have annual sales of $234,000 and costs of $146,000. The project will require fixed assets of $265,000, which will be depreciated on a 5-year MACRS schedule. The annual depreciation percentages are 20.00 percent, 32.00 percent, 19.20 percent, 11.52 percent, 11.52 percent, and 5.76 percent, respectively. The company has a tax rate of 34 percent. What is the operating cash flow for Year 2? a. 68460 b. 86912 c. 58752 d. 73097 e. 75379