Exercise 14-14 (Algo) Comparison of Projects Using Net Present Value [LO14-2]Labeau Products, Limited, of Perth, Australia, has $21,000 to invest in one of the following two projects:Project Y$ 21,000Investment requiredAnnual cash inflowsSingle cash inflow at the end of 6 yearsLife of the projectThe company's discount rate is 18%.Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables.Required:1. Compute the net present value of Project X.2. Compute the net present value of Project Y.3. Which project should the company accept?Project XRequired 1 Required 2 Required 3$ 21,000$ 8,000Complete this question by entering your answers in the tabs below.< Required 16 yearsCompute the net present value of Project X.Note: Round your final answer to the nearest whole dollar amount.Net present valueRequired 2 >$ 50,0006 years

Answer-1Net present value of project X=Present value of annual cash flows - initial…

Labeau Products, Limited, of Perth, Australia, has $21,000 to invest in one of the following two projects: Project Y $ 21,000 Investment required Annual cash inflows Single cash inflow at the end of 6 years Life of the project Required: 1. Compute the net present value of Project X. 2. Compute the net present value of Project Y. 3. Which project should the company accept? Project X Required 1 Required 2 Required 3 $ 21,000 $ 8,000 6 years The company's discount rate is 18%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Complete this question by entering your answers in the tabs below. Net present value Compute the net present value of Project X. Note: Round your final answer to the nearest whole dollar amount. $ 50,000 6 years

Labeau Products, Limited, of Perth, Australia, has $21,000 to invest in one of the following two projects: Project Y $ 21,000 Investment required Annual cash inflows Single cash inflow at the end of 6 years Life of the project Required: 1. Compute the net present value of Project X. 2. Compute the net present value of Project Y. 3. Which project should the company accept? Project X Required 1 Required 2 Required 3 $ 21,000 $ 8,000 6 years The company's discount rate is 18%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Complete this question by entering your answers in the tabs below. Net present value Compute the net present value of Project X. Note: Round your final answer to the nearest whole dollar amount. $ 50,000 6 years

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 19E

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19 es TB MC Qu. 14-36 (Algo) Moates Corporation has... Moates Corporation has provided the following data concerning an investment project that it is considering: $ 190,000 $ 120,000 per year 4 years 9% Initial investment Annual cash flow Expected life of the project Discount rate Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the project is closest to: Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Multiple Choice $190,000 $198,680 $(70,000)
Exercise 14A-1 (Algo) Basic Present Value Concepts [LO14-7] Annual cash inflows that will arise from two competing investment projects are given below: Year Investment A Investment B 1 $ 7,000 $ 10,000 2 8,000 9,000 3 9,000 8,000 4 10,000 7,000 $ 34,000 $ 34,000 The discount rate is 5%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: Compute the present value of the cash inflows for each investment.
Consider the following two mutually exclusive projects: Net Cash Flow End of year Project A Project B - $1,100 $276 $552 -$1,100 $840 2 $630 $420 $828 4. $210 $1,104 Click the icon to view the interest factors for discrete compounding when /= 20% per year. (a) At an interest rate of 20%, which project would you recommend choosing? The present worth of Project A is $ 381.78. (Round to the nearest cent.) The present worth of Project B is $ 524.92 (Round to the nearest cent.) Which project should be selected? Choose the correct answer below. Project A Project B (b) Compute the area of negative project balance, discounted payback period, and area of positive project balance for each project. Fill in the table below. (Round to the nearest dollar.) Project Balances B 1100 1100 -480 -1,044
Duo Corporation is evaluating a project with the following cash flows: Year 0 PO12345 Cash Flow -$ 29,300 11,500 14,200 16,100 13,200 -9,700 The company uses a discount rate of 11 percent and a reinvestment rate of 8 percent on all of its projects. a. Calculate the MIRR of the project using the discounting approach. (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the MIRR of the project using the reinvestment approach. (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. Calculate the MIRR of the project using the combination approach. (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Discounting approach MIRR b. Reinvestment approach MIRR c. Combination approach MIRR % % %
Year Cash Flow (A) Cash Flow (D) $- -$ 0 348,000 51,000 1234 47,000 24,200 2 67,000 22,200 67,000 19,700 14,800 442,000 Whichever project you choose, if any, you require a return of 14 percent on your investment. a-1.What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Project A Project B Payback period years years a- 2. If you apply the payback criterion, which investment will you choose? O Project A O Project B b- What is the discounted payback period for each project? (Do not round intermediate 1. calculations and round your answers to 2 decimal places, e.g., 32.16.)
Duo Corporation Year 0 1 -2345 is evaluating a project with the following cash flows: Cash Flow -$ 29,900 12,100 14,800 16,700 13,800 -10,300 The company uses an interest rate of 10 percent on all of its projects. a. Calculate the MIRR of the project using the discounting approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the MIRR of the project using the reinvestment approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. Calculate the MIRR of the project using the combination approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Discounting approach MIRR b. Reinvestment approach MIRR c. Combination approach MIRR % %
Exercise 12-14 (Algo) Comparison of Projects Using Net Present Value [LO12-2] Labeau Products, Limited, of Perth, Australia, has $15,000 to invest. The company is trying to decide between two alternative uses for the funds as follows: Invest in Project X Invest in Project Y Investment required $ 15,000 $ 15,000 Annual cash inflows $ 5,000 Single cash inflow at the end of 6 years $ 36,000 Life of the project 6 years 6 years The company’s discount rate is 16%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value of Project X. 2. Compute the net present value of Project Y. 3. Which project would you recommend the company accept?
1/. The company ABC is considering two mutually exclusive investment programs which have a lifetime of two years. The cash flows of the two programs (in thousands of euros), as well as the corresponding probabilities of their realization are presented in the following tables: Year 0 Year 1 Cost Probability Cash Flow -400 Year 0 40% -700 60% Cost Probability Cash Flow 35% Year 1 65% TOPIC 1st INVESTMENT A 440 380 INVESTMENT B 480 Year 2 Potential Cash Flow 60% 40% 70% 30% 340 Chance Year 2 40% 60% 55% 45% 460 420 410 360 Cash Flow 490 480 380 330 AV. Consider, based on the criterion of Expected Net Present Value, which of the two investments would you choose, given that the weighted average cost of capital in the case of Investment A is estimated at 10%, Investment B at 8%, while the risk-free rate is 3%. B/. Let's say at the end of the first year a prospective buyer comes along and makes an offer to buy the investment you chose to implement in question a/. According to his offer, he…
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$ -$ 0 1235 4 NO a- Whichever project you choose, if any, you require a return of 14 percent on your investment. Project A Project B 357,000 38,000 58,000 58,000 433,000 a-1. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) 46,500 23,300 21,300 18,800 13,900 Project A Project B Payback period If you apply the payback criterion, which investment will you choose? 2. O Project A O Project B years years b- What is the discounted payback period for each project? (Do not round intermediate 1. calculations and round your answers to 2 decimal places, e.g., 32.16.) Discounted payback period years years
Problem 6. Justine Global Info Tech records the following cash flows at the end of each year for a project. If the firm's discount rate is 11%, what is the PRESENT VALUE of the project? Year Cash Flow 1 P794,633.00 P542,149.00 P836,200.00 P716,080.00 P520,354.00 2 3 4 5
Annual cash inflows from two competing investment projects are given below: Investment A $ 4,000 5,000 6,000 7,000 $ 22,000 Year 1234 The discount rate is 10%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: Compute the present value of the cash inflows for each investment. Year 1 2 3 4 $ Investment B $ 7,000 6,000 5,000 4,000 $ 22,000 Present Value of Cash Flows Investment A 0 $ Investment B 0 M ...
Lesi PayUBLK Perou, el Presem velue Method, and Analysis Elite Apparel Inc. is considering two Investment projects. The estimated net cash flows from each project are as follows: Year Plant Expansion Retall Store Expansion 1 2 3 4 5 Total Year Each project requires an Investment of $241,000. A rate of 15% has been Present Value of $1 at Compound Interest 6% 10% 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 1 2 3 4 5 6 7 8 9 10 Required: $133,000 108,000 94,000 85,000 26,000 $446,000 0.909 Net present value 0.826 0.751 15% 0.893 0.870 0.833 0.797 0.756 0.694 0.712 0.579 0.683 0.636 0.572 0.482 0.621 0.557 0.497 0.402 0.564 0.507 0.432 0.335 0.513 0.452 0.376 0.279 0.467 0.327 0.233 0.424 0.284 0.194 0.385 0.247 12% 0.404 0.361 0.322 2 years Present value of net cash flow total Less amount to be invested $111,000 130,000 89,000 62,000 54,000 $446,000 1a. Compute the cash payback period for each project. Cash Payback Period 2 years ✓ ✓ S api 0.658 S 20% Plant Expansion…