Gomez is considering a $195,000 investment with the following net cash flows. Gomez requires a 9% return on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Year 5 Net cash flows Year 1 $80,000 Year 2 $58,000 Year 3 Year 4 $74,000 $149,000 $59,000 (a) Compute the net present value of this investment. (b) Should Gomez accept the investment?
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How do I find the year 2-5 Present value of 1 at 9%?
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- Project B cost $5,000 and will generate after-tax net cash inflows of $500 in year one, $1,200 in year two, $2,000 in year three. $2,500 in year four, and $2,000 in year five. What is the NPV using 8% as the discount rate? For further instructions on net present value in Excel, see Appendix C.Fenton, Inc., has established a new strategic plan that calls for new capital investment. The company has a 9.8% required rate of return and an 8.3% cost of capital. Fenton currently has a return of 10% on its other investments. The proposed new investments have equal annual cash inflows expected. Management used a screening procedure of calculating a payback period for potential investments and annual cash flows, and the IRR for the 7 possible investments are displayed in image. Each investment has a 6-year expected useful life and no salvage value. A. Identify which project(s) is/are unacceptable and briefly state the conceptual justification as to why each of your choices is unacceptable. B. Assume Fenton has $330,000 available to spend. Which remaining projects should Fenton invest in and in what order? C. If Fenton was not limited to a spending amount, should they invest in all of the projects given the company is evaluated using return on investment?Gonzalez Company is considering two new projects with the following net cash flows. The company’s required rate of return on investments is 10%. (PV of $1, FV of $1, PVA of $1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Year Net Cash Flows Project 1 Project 2 Initial investment $(46,000) $(74,000) 1. 11,500 35,000 2. 25,900 20,000 3. 21,500 25,000 Compute payback period for each project. Based on payback period, which project is preferred? Compute net present value for each project. Based on net present value, which project is preferred? Complete this question by entering your answers in the tabs below. Required A Required B Compute payback period for each project. Based on payback period, which project is preferred?Note: Cumulative net cash outflows must be entered with a minus sign. Do not round your intermediate calculations. Round your Payback Period answer to 2 decimal places.…
- Nick is considering a capital investment that costs $525,000 and will provide the following net cash inflows: Year Net Cash Inflow 1 $298,000 2 $202.000 3 $104,000 1) Using hurdle rate of 10%, find the NPV of the investment 2) Find IRR of the capital investment.Gomez is considering a $200,.000 investment with the following net cash flows. Gomez requires a 15% return on its investments. (PV of $1. EV of $1. PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) Year 1 Year 2 Year 3 Year 4 Year 5 Net cash flows $76, 800 $59,000 S100,000 $173,000 $41,000 (a) Compute the net present value of this investment. (b) Should Gomez accept the investment? Complete this question by entering your answers in the tabs below. Required A Required B Compute the net present value of this investment. (Round your answers to the nearest whole dollar.) Present Value of 1 at 15% Present Value of Net Cash Flows Net Cash Year Flows Year 1 Year 2 Year 3 Year 4 Year 5 Totals Initial investment Net present value Required B > K Hequirod AGonzalez Company is considering two new projects with the following net cash flows. The company’s required rate of return on investments is 10%. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Year Net Cash Flows Project 1 Project 2 Initial investment $(40,000) $(80,000) 1. 10,000 35,000 2. 26,600 15,000 3. 17,000 40,000 a. Compute payback period for each project. Based on payback period, which project is preferred?b. Compute net present value for each project. Based on net present value, which project is preferred?
- Gomez is considering a $195,000 Investment with the following net cash flows. Gomez requires a 12% return on Its Investments. (PV of $1. FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Net cash flows (a) Compute the net present value of this Investment. (b) Should Gomez accept the investment? Required A Required B Year Year 1 $62,000 Complete this question by entering your answers in the tabs below. Year 1 Year 2 Year 3 Year 4 Year 5 Year 2 $49,000 Totals Initial investment Net present value Net Cash Flows Compute the net present value of this investment. (Round your answers to the nearest whole dollar.) Present Value of 1 at 12% Present Value of Net Cash Flows Year 3 $97,000 Year 4 $170,000Gonzalez Company is considering two new projects with the following net cash flows. The company's required rate of return on investments is 10%. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Year Initial investment 1. 2. 3. Net Cash Flows Project 1 $(60,000) 15,000 27,400 22,000 Project 2 $(55,500) 35,000 15,000 22,000 a. Compute payback period for each project. Based on payback period, which project is preferred? b. Compute net present value for each project. Based on net present value, which project is preferred?Assume a $50,000 investment and the following cash flowa for two aleternatives.. Year Investment A Investment B 1 $10,000 $20,000 2 $11,000 $25,000 3 $13,000 $15,000 4 $16,000 5 $30,000 Which alternative would you select under the payback method? 6
- J&R Wealth is considering an investment with the following cash flow: FOY Cash Flow 1-10 10 $500,000 $92,500/year $50,000 If MARR is 12%, what is the ERR? Is this project acceptable?-ollowlng Is Information on two alternative Investments belng considered by Jolee Company. The company requires a 10% return from Its Investments. Project A $(196,000) Project B $(141, 000) Initial investment Expected net cash flows in: Year 1 49,000 65,000 89,295 41,000 59,000 75, 000 75,000 75,000 Year 2 Year 3 Year 4 99,400 74,000 Year 5 Compute the Internal rate of return for each of the projects using excel functlons. (Round your answers to 2 declmal places.) IRR Project A % Project B < Prev 9 of 9 Next L Type here to search F11 F1 F6 F7 F8 F9 F10 F2 F3 F4 F5 F1 23 1 2 4. 7 8 T Y U P G K S C N M B EIConsider the two investments with the following sequences of cash flows. At Marr of 15%. What is the IRR of project B? N Project A Project B -$30,000 -$15,000 1 $2,000 $10,000 2 $6,000 $10,000 3 $12,000 $10,000 4 $24,000 $10,000 $28,000 $5,000