From the following information calculate the Net Present Value of the two projects & suggestwhich of the two projects should be accepted assuming a discount rate of 10 %.Project YRs. 30,000Project XInitial InvestmentEstimated LifeRs. 20,0005 years5 yearsScrap ValueRs. 1,000Rs. 2,000The profits before Depreciation and after Taxes (Cash flows) are as follows:Project XRs. 5,000Project YYear IRs. 20,000Year 2Rs. 10,000Rs. 10,000Rs. 5,000Rs. 3,000Rs. 2,000Year 3Rs. 10,000Year 4Rs. 3.000Year 5Rs, 2,000

Capital budgeting is a process of investing funds into long terms projects that provide benefits in…

From the following information calculate the Net Present Value of the two projects & sugge which of the two projects should be accepted assuming a discount rate of 10%. Project Y Rs. 30,000 5 years Rs. 2,000 Project X Initial Investment Rs. 20,000 Estimated Life 5 years Scrap Value Rs. 1,000 The profits before Depreciation and after Taxes (Cash flows) are as follows: Project Y Rs. 20,000 Rs. 10,000 Rs. 5,000 Rs. 3,000 Rs, 2,000 Project X Rs. 5,000 Year I Year 2 Rs. 10,000 Rs. 10,000 Rs. 3.000 Year 3 Year 4 Year 5 Rs, 2,000

From the following information calculate the Net Present Value of the two projects & sugge which of the two projects should be accepted assuming a discount rate of 10%. Project Y Rs. 30,000 5 years Rs. 2,000 Project X Initial Investment Rs. 20,000 Estimated Life 5 years Scrap Value Rs. 1,000 The profits before Depreciation and after Taxes (Cash flows) are as follows: Project Y Rs. 20,000 Rs. 10,000 Rs. 5,000 Rs. 3,000 Rs, 2,000 Project X Rs. 5,000 Year I Year 2 Rs. 10,000 Rs. 10,000 Rs. 3.000 Year 3 Year 4 Year 5 Rs, 2,000

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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Consider the following two projects with cash flows in $: Project Year 0 Year 1 Year Year 3 Year 4 Discount Rate A - 100 40 50 60 n/a 0.15 B -73 30 30 30 30 0.15 For Project A, after two years, the project has been paid off for $90 out of $100. To find out the fraction of the third year, we take the $10 yet to be paid and divide it by $60, which is $10/$60 = 0.167. Therefore, the payback period for Project A is 2.167 years. Following the same logic, calculate the payback period for Project B.
Based on the picture, Calculate: a) The payback period for the project b) The discounted payback period for the project c) The net present value for the project Please help me ASAP. Thank you. I'm tryna do my revision. ?
Please help me option should match
Referring to the table below, calculate the Net Present Value (NPV) and Profitability Index (PI). The required rate of return for these projects is USD10%. The projects’ expected cash flows are as follows: Year Machine 1 (USD) Machine 2 (USD) 0 (17,000) (17,000) 1 8,000 2,000 2 7,000 5,000 3 5,000 9,000 4 3,000 9,500
A proposed project is estimated to have the following cash, at 9% MARR 0 $900 1 $800 a. Using 7% interest rate, indicate the NPV of the investment. b. At 20%, indicate the NPV of the investment. 2 $700 3 $600 c. What is the IRR for this investment? Write answer in percentage value, up to 2 decimal places. 4 $500 $1500 $1500 $1500 $1500 5 6 7 8
The investment required for a project is estimated at OMR 50,000. The cash flows expected from the project are: Year 1 OMR 22,000, Year 2 OMR 24,000 and Year 3 OMR 18,000. In this case, the Payback period of the project is: O a. None of these O b. 1.76 yedars O c. 2.22 years o d. 2.34 years
Alba Company has an investment opportunity to invest their money around BD 50,000 with two choice of project, namely Project (A) and Project (B). Additionally, the discount rate for both project around 6%. The cash inflow for both projects as following: Year Project A Project B 1 8,000 20,000 13,000 20,000 3 18,000 20,000 4 20,000 20,000 Required: Calculate the net cash flow by using payback period method Calculate the net cash flow by using net present value method Calculate the net cash flow by using profitability index method Interpret each results of method in terms of the project expected profitability for Alba Company a. b. с. d. A BI
Mendez Company has identified an investment project with the following cash flows. Year Cash Flow 1 $ 1,150 2 1,030 3 1,520 4 1,880 If the discount rate is 11 percent, what is the present value of these cash flows? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. What is the present value at 16 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. What is the present value at 22 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
Newland Company is considering investing in one of two projects – A or B. The initial cost and net cash inflows from each project are shown below. The discount rate for both projects is 18% per cent. Cash Flow Project A Project B $ $ Initial Cost 3,000,000 3,500,000 Net Cash Inflows Year 1 800,000 1,000,000 Year 2 800,000 1,000,000 Year 3 1,200,000 700,000 Year 4 1,200,000 800,000 Year 5 1,200,000 800,000 Year Factor 1 0.8475 2 0.7182 3 0.6086 4 0.5158 5 0.4371 Discount factors for the projects @18% per annum are as follows: Required: Calculate the Accounting Rate of Return on average capital for each project. Calculate the net present value (NPV) for each project and identify the project in which the company should invest, giving ONE reason for your choice.
The total investment required for two projects are estimated at OMR90, 000. The cash flows expected from the two projects for the first four years are explained in the table below. Year Project A Year 1 25,000 Year 2 38,500 Year 3 42,000 Year 4 48,000 What will be pay back period? a. 3.03 O b. 3.23 O c. 2.86 O d. All the options are wrong e. 2.63
Green Submarine has a project with the following cash flows: Year Cash Flows −$ 17,300 1 6,530 2 11,000 3 7,510 4 −2,500 The discounting rate is 8 percent and the reinvestment rate is 10 percent. What is the MIRR for this project using the combination approach?

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