Help Dose an investment has cash inflows of R dollars at the end of each year for two years. The present value of these cash inflows using a 12% discount rate Choice sometimes greater than under a 10% discount rate and sometimes less; it depends on R. O greater than under a 10% discount rate. O less than under a 10% discount rate. O equal to that under a 10% discount rate. 节 < Prev 9 of 20 Next > 2009

Help Dose an investment has cash inflows of R dollars at the end of each year for two years. The present value of these cash inflows using a 12% discount rate Choice sometimes greater than under a 10% discount rate and sometimes less; it depends on R. O greater than under a 10% discount rate. O less than under a 10% discount rate. O equal to that under a 10% discount rate. 节 < Prev 9 of 20 Next > 2009

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 23E: Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The...

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Project Y requires a $350,000 investment for new machinery with a four-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Machinery Selling, general, and administrative expenses Income Revelant Time Value of Money factors: PV $1 (8%, 4 years): PVA $1 (8%, 4 years): PVAD $1 (8%, 4 years): FV $1 (8%, 4 years): FVA $1 (8%, 4 years): FVAD $1 (8%, 4 years): 0.7350 3.3121 3.5771 1.3605 4.5061 4.8666 Project Y $350,000 157,500 87,500 49,000 $56,000
a)Calculate the internal rate of retum (IRR) of the following cash flow. Determine if this is a good investment for a MARR of 3% per year. b)Calculatethe extemalrate of return (ERR) of the following cash flow by assuming a MARR of 3% per year. Determine if this is a good investment. Cash Flow, $ -100,000 -10,000 -1,000 13,000 13,000 13,000 Cash Flow, $ |16,000 |16,000 16,000 16,000 16,000 16,000 Year 6 Year 1 2 3 4 5 10 11
Find the Discounted Payback Period (DPP) for Oman Water Company if the initial investment is 6000 OMR and the cash Inflows are as follows: Year 1 =2500 OMR; Year 2 =3000 OMR; Year 3=2500 OMR and Year 4=3000 OMR. Use discount rate as 8%. Select one: О а. 2.16 years. О Б. 2.56 yеars. O c. 2.96 years. O d. 3.16 years. O e. None of the options
不 The cash flow diagram below has an internal rate of retum of 27% What is the value of Y if perpetual service is assumed? Click the icon to view the diagram for cash flows Click the icon to view the interest and annuity table for discrete compounding when the MARR is 27% per year If perpetual service is assumed, the value of Y is $(Round to the nearest dollar) More Info N 1 2 3 4 5 6 7 a 9 10 Single Payment Discrete Compounding: -27% Compound Amount Present Factor To Find F Given P F/P 12700 10120 2.0484 20014 33038 4 1950 5.3258 67675 85040 10 9153 Worth Factor To Find P Given F PIF 07874 06200 04002 Compound Amount Factor To Find F Given A FIA 0.1164 0.0016 1.0000 2.2700 3.8829 59013 85327 0.3844 03027 02303 0.1877 0.1478 21.3612 Uniform Series Present Worth Factor To Find P Given A PIA 07874 1.4074 10956 2:2000 25827 11.8366 2.8210 10.0324 3.0087 3.1564 3.2720 28.1287 307235 33644 Sinking Fund Factor To Find A Given F A/F 1.0000 04405 02575 0.1600 0.1172 0.0045 00624 0.0405 00356…
Solve for the value of X in the accompanying table, so that the cash flow A is equivalent to the cash flow B. Let i 8% per year. Cash flow A Cash flow B Year Cash flow, $ Year Cash flow, S 2. 8,000 2. 3. 3. 4. -2X 8,000 3X Select one: O a. 8381.6 O b. 9009.4 O c.7126.0 O d. 9637.2 O e. 7753.8 4.
es A project has the following cash flows: Year Cash Flow 0 -$ 17,200 1 7,900 2 9,200 3 7,700 a. What is the NPV at a discount rate of zero percent? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the NPV at a discount rate of 12 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the NPV at a discount rate of 22 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What is the NPV at a discount rate of 28 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. NPV b. NPV c. NPV d. NPV
For the cash flow shown below. Find the external rate of return (EROR) using the modified rate of return approach (MIRR), an investment rate of 15% per year, and a borrowing rate of 8% per year. Year 3 4 NCF,$ -9000 +4100 -2000 -7000 +12000 +700 +800 Select one: O a. 7.9% Ob.9.9% O c. 5.9% O d. 11.9%
Calculate the NPV if the discount rate is 14% if: 1- Cost investment OMR 13,000. 2- Cash flows: First year Second year Third year OMR 5,000 3,000 9,000 A- B I II !
Fox Co. has identified an investment project with the following cash flows. Year Cash Flow 1 S 1,090 2 940 3 1, 490 4 1,850 a. If the discount rate is 12 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the present value at 15 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.) c. What is the present value at 21 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
pie to slun 7. Use the MIRR Method to find the External ROR for the nonconventional net cash flow series shown, with an investment rate of 12% per year and a borrowing rate of 9% per year. Year NCF, $ 0 -40,000 1 +13,000 2 3 -29,000 +25,000 4 +50,000 0
Mendez Company has identified an investment project with the following cash flows. Year Cash Flow 1 $770 2 1,030 3 1,290 4 1,400 a. If the discount rate is 10 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the present value at 17 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the present value at 25 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Consider the following two mutually exclusive projects: Year Cash Flow (X) Cash Flow (Y) 0 -24,063 -24,063 1 10,320 12,063 2 10,900 9,360 3 10,800 10,400 Sketch the NPV profiles for X and Y over a range of discount rates from zero to 25 percent (take 0%, 5%, 10%, 15%, 20%, 25%). Calculate the IRR of the projects. What is the relationship between NPV and IRR for your values? What is the crossover rate for these two projects and what it indicates for your values? Note - answer all the parts of the question.