Future cash flows ex Project A $ 850,000 440,000 $ 410,000 1.93 Project B $830,000 420,000 $ 410,000 1.98 Proj $ $
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- Carmen, Inc. is considering three different independent investment opportunities. The present value of future cash flows, initial investment, net present value, and profitability index for each of the projects are as follows: Project A Project B Project C Present value of future cash flows $450,100 $313,100 $405,000 Initial investment 200,000 155,000 190, еее Net present value $250, 100 $158,100 $215,000 Profitability index 2.25 2.02 2.13 In what order should Carmen prioritize investment in the projects? Multiple Cholce С, В, А O A, B, C А, С, В C, A, BA firm is considering the following independent projects. Project Investment Present value offuture cash flows NPV A $130 $176 $46 B $103 $115 $12 C $183 $287 $104 D $161 $199 $38 E $184 $273 $89 What is the Profitability Index of Project B? Question 5Answer a. 0.85 b. 1.12 c. 0.89 d. 1.18Daymore plc is currently considering three investment opportunities. The following is the details of the investments:-Project A:-1. initial outlay $80m2. Future net inflows Year 1: $190mYear 2: $10mProject B:-1. initial outlay $140m2. Future net inflows Year 1: $180mYear 2: $120mProject C:-1. initial outlay $90m2. Future net inflows Year 1: $10mYear 2: $220mThe company has a capital budget that is restricted in the year of the investment and it will not be possible to undertake all three projects in full. The investment opportunities are independent of one another and each project is divisible (that is, it is possible to undertake part of an investment and to receive a pro-rata return). The cost of capital of the company is 12% and the company uses the net present value method of investment appraisal.Required:Calculate and determine the ranking of the three investment opportunities? (The ranking for the first choice, second choice, and third choice is 1, 2, and 3 respectively). Show…
- Carol, Inc. is considering three different independent investment opportunities. The present value of future cash flows, initial investment, and net present value for each of the projects are as follows: Project A Project B Project C Present value of future cash flows $ 651,200 $ 476,700 $ 585,200 Initial investment 280,000 235,000 270,000 Net present value $ 371,200 $ 241,700 $ 315,200 In what order should Carol prioritize investment in the projects? Multiple Choice A, B, C C, A, B C, B, A A, C, BBoxwood, Incorporated is considering three independent investment opportunities. The present value of future cash flows, initial investment, and net present value for each of the projects are as follows: Present value of future cash flows Initial investment Net present value Project A $ 1,790,000 790,000 $ 1,000,000 In what order should Boxwood prioritize investment in the projects? Project B. $ 1,780,000 800,000 $980,000 Project C $ 1,610,000 750,000 $ 860,000 Multiple Choice A, B, C B, C, A О О A, C, B B, A, C 的Bruin, Incorporated, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 −$ 28,500 −$ 28,500 1 13,900 4,050 2 11,800 9,550 3 8,950 14,700 4 4,850 16,300 a-1. What is the IRR for each of these projects? a-2. Using the IRR decision rule, which project should the company accept? multiple choice 1 Project A Project B a-3. Is this decision necessarily correct? multiple choice 2 Yes No b-1. If the required return is 11 percent, what is the NPV for each of these projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b-2. Which project will the company choose if it applies the NPV decision rule? multiple choice 3 Project A Project B c. At what discount rate would the company be indifferent between these two projects? (Do not round intermediate…
- Bruin, Incorporated, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 −$ 66,000 −$ 66,000 1 42,000 28,400 2 36,000 32,400 3 24,000 38,000 4 15,200 24,400 a-1. What is the IRR for each of these projects? a-2. If you apply the IRR decision rule, which project should the company accept? b-1. Assume the required return is 12 percent. What is the NPV for each of these projects? b-2. Which project will you choose of you apply the NPV decision rule? c-1. Over what range of discount rates would you choose Project A? c-2. Over what range of discount rates would you choose Project B? d. At what discount rate would you be indifferent between these two projects?Cummings Products Company is considering two mutually exclusive investments whose expected net cash flows are as follows: Expected Net Cash Flows Year Project A Project B 0 -$340 -$630 1 -528 210 2 -219 210 3 -150 210 4 1,100 210 5 820 210 6 990 210 7 -325 210 Select the correct graph for NPV profiles for Projects A and B. The correct graph is . What is each project's IRR? Do not round intermediate calculations. Round your answers to two decimal places. Project A: % Project B: % Calculate the two projects' NPVs, if each project's cost of capital was 11%. Do not round intermediate calculations. Round your answers to the nearest cent. Project A: $ Project B: $ Which project, if either, should be selected? should be selected. Calculate the two projects' NPVs, if each project's cost of capital was 18%. Do not round intermediate calculations. Round your answers to the nearest cent. Project A: $ Project B:…A company is considering three alternative investment projects with different net cash flows. The present value of net cash flows is calculated using Excel and the results follow. Potential Projects Present value of net cash flows (excluding initial investment) Initial investment Project A $ 11,226 (10,000) Project B $ 10,568 (10,000) a. Compute the net present value of each project. b. If the company accepts all positive net present value projects, which of these will it accept? c. If the company can choose only one project, which will it choose on the basis of net present value? Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the net present value of each project. Potential Projects Project A Project B Project C Present value of net cash flows Initial investment Net present value $ $ $
- The management of Winstead Corporation is considering the following three investment projects (Ignore income taxes.): Project Q Project R Project S Investment required $ 57,200 $ 97,200 $ 176,000 Present value of cash inflows $ 62,092 $ 111,792 $ 193,320 The only cash outflows are the initial investments in the projects. Required: Rank the investment projects using the project profitability index.Garage, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$43,500 -$43,500 1 21,400 6,400 2 18,500 14,700 3 13,800 22,800 4 7,600 25,200 What is the IRR for each of these projects? Using the IRR decision rule, which project should the company accept? Is this decision necessarily correct? If the required return is 11 percent, what is the NPV for each of these projects? Which project will the company choose if it applies the NPV decision rule? Over what range of discount rates would the company choose project? A? Project B? At what discount rate would the company be indifferent between these two projects? Explain.ZXA is considering investments in four different projects. Select all projects that have conventional cash flows? ___________ (A, A and D, B and C, or C). Which projects will have multiple IRRs? ________________ (A, A and D, B and C, or C).
