Net present value:a) is greater if cash receipts occur later rather than earlier.b) is greater if cash receipts occur earlier rather than later.c) is revenue minus fixed cost.d) is preferred over break-even analysis.c) is greater if $100 monthly payments are received in alump sum ($1,200) at the end of the year.
Q: A project that increased sales was accompanied by $60,000 increasé iñ iñvéntóry, å $25,000 increase…
A: Given information: Increase in inventory $60,000 Increase in accounts receivables $25,000 Increase…
Q: An arithmetic cash flow gradient series equals $500 in year 1, $600 in year 2, and amounts…
A: Computation:
Q: The function f(x)=800 represents the rate of flow of money in dollars per year. Assume a 15-year…
A: Present value is the discounted value of future cash flows that is expected to be received at…
Q: A company is planning to expand its business is costing OMR 21756. The following cash inflows are…
A: Given information: Initial investment OMR 21,756.00 Year Cash flows 1 OMR 12,960 2 OMR…
Q: An arithmetic cash flow gradient series equals $800 in year 1, $900 in year 2, and amounts…
A: A cash flow series is a series of equal payments, that is, in a cash flow series there are regular…
Q: + Explanation of Time Needed for Payback with uneven cash flows Note: For each year in which the…
A: The payback period is the amount of time that is required to break even, i.e., to recover the…
Q: . How much is the average daily collections? Format: 111,111 2. How much is the increase in the…
A: JJF Wholesale has an average collection delay of 8 days from the time the customer mails the check…
Q: Consider the following cash flows: Year Cash Flow -$28,600 15,100 13,800 10,200 1 2 3 a. What is the…
A: profitability index is given by present value of cash flow to initial investment. Profitability…
Q: Consider the following cash flow profile: Suppose the positive-valued cash flows are now replaced by…
A: Cash flows are the amount of cash and cash equivalents inflow and outflow of the company in a…
Q: NPV(Net Present Value) with discount rate is 6% for this period and cashflow as followed. Period 0,…
A: Cash flows are the cash generated from the operation of the business organisation. In other words,…
Q: Consider the following cash flows: Year Cash Flow -$29,900 13,800 15,100 11,500 1 3 a. What is the…
A: Profitability index measures the return generated by each dollar of investment. Itcan be calculated…
Q: Round off the final answer to the nearest whole number. 1) Compute the annual cash inflow. 2)…
A: Net Present Value: It is the present worth of the annual cash flows of the project. If the value…
Q: Which of the following is the MOST correct? In reference to the time value of money, the present…
A: In reference to the time value of money, the present value is always labeled as t=1 is incorrect.…
Q: year. The same helps the company generate cash for working of t ing expenses, which is usually for a…
A: Companies try to increase the sales in the future so that good return on investment and better…
Q: Given the following cash flow for a certain investment and a MARR of 12% per year: 0 1 2 3 4 5 6…
A: Here, Cash Flow in Year 0 is -P30,000 Cash Flow in Year 1 is -P 19,000 Cash Flow in Year 2, 3 and 4…
Q: Fill in the blank: If the net profits made during the year are Rs 50,000 and the bills…
A: Bill receivables is an current operating assets. When bills receivables decreases, that means there…
Q: What will be the total present value of an income flow starting with 1500TL/year in year 3 and…
A: Calculate the present value of the expected income of 1,500TL/year that grows at a 16% rate from…
Q: A company has the following net cash inflows. Today -$7000, Year 1-$15 000, Year 2-$9000, Year 3+…
A: Net present value (NPV) of an alternative/project refers to the variance between the initial…
Q: An arithmetic cash flow gradient series equals $600 in year 1, $700 in year 2, and amounts…
A: Present worth is the sum of the discounted values of all the future cash flows.
Q: Consider the following three cash flow series: Determine the values of X and Y so that you are…
A: Computation of present worth of cash flow B is as…
Q: A. Payback. The company requires all projects to payback within 3 years. Calculate the payback…
A: Payback period = Year of last negative cash flow + (Absolute value of last negative cash flow/Next…
Q: The future value of a cash flow occurring 36 months from today is $15000, and its present value is…
A: Individuals deposit an amount in an account at a given interest and predetermined duration in order…
Q: A company is planning to expand its business is costing OMR 21078. The following cash inflows are…
A: Profitability index is computed to determine the ability of the company to generate profit from the…
Q: .How much is the average daily collections? 2. How much is the increase in the average cash balance…
A: Lock box is a system where that can be utilized to reduce the time between customer sending a check…
Q: Suppose (1) re-finance rate remains constant, (2) all cashflows are incurred in the end of the year,…
A: MIRR is one of the methods of capital budgeting to determine the net benefit or profitability of the…
Q: Last year sales were $300,000, net operating income was $75,000, and averageoperating assets were…
A: Last year expenses = Sales - Net operating income = $300,000 - $75,000 = $225,000
Q: Smith Company has the following annual cash flows: Year 0: –173,160 Year 1: 614,718 Year 2:…
A: we need to find the discount rate by trial and error method so when, NPV need to become zero or near…
Q: Consider an uneven cash flow stream: Year Cash Flow 0 $2,000 1 $2,000 2 $0 3 $1,500 4…
A: Before we get into the solution, let's understand two reciprocal concepts:If present value (PV) is…
Q: he gross
A: Lock box is a system where that can be utilized to reduce the time between customer sending a check…
Q: Cash Year Flow -24 9,600 4,700 2 5,300 3 2,200 a. What is the profitability index for the cash flows…
A: Profitability index= PV of cash inflows/ PV of cash outflows
Q: A company expects their revenues to decrease by $14,587 over the next 8 years, starting from year 2.…
A: Discounting is a technique to compute the present value (PV) of future cashflows by using an…
Q: Determine the rate of return per year for the cash flow series shown below. Year Cash Flow, $…
A: Internal rate of return is one of the modern techniques of capital budgeting that take into…
Q: The maintenance costs of a car increase by $200 each year. This cash flow pattern is best described…
A: The maintenance costs of a car increase by $200 each year. Describe the cash flow pattern. When a…
Q: Consider the following cash flows: Year Cash Flow -$6,600 1,900 3,900 1,700 1,400 What is the…
A: Year Cash flows Cumulative Cash flows 0 (6600) (6600) 1 1900 (4700) 2 3900 (800) 3 1700 900…
Q: Which of the following would decrease free cash flow? O A. year-over-year reductions in inventory B.…
A: Cash flow is the cash inflow and cash outflow in an organization. Cash flow statement consists of…
Q: Calculate the equivalent AW at i 10% per year for the following net cash flow: Year Cash flow, $…
A: Given: Year Cash flows 0 1 -$2,000.00 2 -$2,000.00 3 -$2,000.00 4 $5,000.00 5…
Q: 1. What are the annual net cash inflows that will be provided by the new dipping machine? Reduction…
A: 1: Computation of net annual cash inflows by new dipping machine - Sweetwater Candy Company…
Q: If interest is 10%, find the net present worth, net future worth, and net annual equivalent worth.…
A: Net present worth: Given inflows and outflows, calculate the net surplus back to the present time…
Q: a. Compute his likely cash balance or deficit for the end of the year. Start with beginning cash and…
A: We know that Ending cash balance = Opening cash balance + Cash inflows - Cash outflows It is…
Q: A company is planning to expand its business is costing OMR 19252. The following cash inflows are…
A: Profitability index can be calculated by dividing the present worth of future cash flows and the…
Q: ecovered investment is greater than the annual cash flow, the payback period is "1". If the…
A: Pay back period is the period required to recover the initial investment of the project.
Q: Compute the time needed for payback for the following example assuming the investment required an…
A: The payback period is the time required by the company to recover its initial investment, it doesn't…
Q: An arithmetic cash flow gradient series equals $350 in year 1, $450 in year 2, and amounts…
A: The cash flows that decrease or increase by the same amount is known as arithmetic cash flows.
Q: Consider the following cash flow: Year Cash Flow -$ 29,800 13,900 15,000 11,400 1 2 3 a). What is…
A: Calculation of profitability index: Answer: Profitability index at 9% rate is 1.15 Profitability…
Q: Find the value of the unknown quantity Z in the following diagram, such that the equivalent cash…
A: A diagrammatic representation of cashflows over a period of time is called cash flow diagram. Given…
a) is greater if cash receipts occur later rather than earlier. b) is greater if cash receipts occur earlier rather than later. c) is revenue minus fixed cost. d) is preferred over break-even analysis. c) is greater if $100 monthly payments are received in a lump sum ($1,200) at the end of the year. |
Step by step
Solved in 3 steps
- A. 20Y5 Annual net cash flow is incorrect. B. Present value of annual net cash flow Less investment are incorrect. a. For each year, subtract the driver salaries and operating costs from the revenues. For 20Y3 only, add the residual value. b. Multiply the present value of $1 factor for each year by that year's net cash flow (from a). Subtract the amount to be invested from the total present value of the net cash flow.An estimate has the following cost and revenue cash flows. The cash flows are assumed to occur at the end of the year. (a) If interest is 10%, find the net present worth, net future worth, and net annual equivalentworth.(b) Find the rate of return. (Hint: The guessing range is 25 to 30%).(c) Present a summary of the four methods Year Cost Revenue 0 $800 $0 1 - $450 2 - $425 3 - $400Below is a year-end cash flow diagram in dollars, deferred in some years. MARR = 2.7% Find the value of thearrow indicated.
- Consider the following cash flows: Year Cash Flow 0 –$7,400 1 2,100 2 4,700 3 1,900 4 1,600 What is the payback period for the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)The Fleming Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated below. The corporate tax rate is 23 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Year O Year 1 Year 2 Year 3 Year 4 $27,000 Investment Sales revenue $ 14,000 $ 14,500 $15,000 $12,000 Operating costs Depreciation Net working capital spending 2,400 6,750 ? 3,200 3,000 6,750 380 3,100 6,750 6,750 330 430 330 a. Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.) Year 1 Year 2 Year 3 Year 4 Net income b. Compute the incremental cash flows of the investment for each year. (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) Year 0 Year 1 Year 2 Year 3 Year 4 Cash flow ( Prev 2 of 10 Next >When the annual cash flows are unequal, the payback period is computed by adding the annual cash flows until such time as the original investment is recovered. If a fraction of a year is needed, it is assumed that cash flows occur evenly within each year. The steps for determining the payback period with uneven cash flows is as follows: 1. Add the annual cash flows to one another until the investment is recovered. 2. For each full year's worth of cash flows consumed, add that year to your calculation for total payback years. 3. If you arrive at a point where only part of the year's cash flows are needed, only add the fraction of the year's cash flows relevant to recovering the initial investment to the total payback years. 4. If the unrecovered investment is greater than the annual cash flow, the payback period is "1". If the unrecovered investment is less than the annual cash flow the time needed for payback is computed by dividing the unrecovered investment by the annual cash flow…
- 2. Determine Project Y’s payback period The numerator drop down options are: accounts receivable, annual net cash flow, average total assets, cost of goods sold, current assets, current liabilities, income, initial investment, net sales the denominator drop down options are: accounts receivable, annual net cash flow, average total assets, cost of goods sold, cost of investment, current asssets, current liabilities, income, interest expense, net salesWhen the annual cash flows are unequal, the payback period is computed by adding the annual cash flows until such time as the original investment is recovered. If a fraction of a year is needed, it is assumed that cash flows occur evenly within each year. The steps for determining the payback period with uneven cash flows is as follows: 1. Add the annual cash flows to one another until the investment is recovered. 2. For each full year's worth of cash flows consumed, add that year to your calculation for total payback years. 3. If you arrive at a point where only part of the year's cash flows are needed, only add the fraction of the year's cash flows relevant to recovering the initial investment to the total payback years. 4. If the unrecovered investment is greater than the annual cash flow, the payback period is "1". If the unrecovered investment is less than the annual cash flow the time needed for payback is computed by dividing the unrecovered investment by the annual cash flow…What is the payback period and the IRR in the following cash flow: Year end 0 1 2 3 4 Cash Flow -3,345 1,100 1,100 1,100 1,100
- Consider the following cash flows: Year Cash Flow 0 −$28,300 1 15,400 2 13,500 3 9,900 a. What is the profitability index for the cash flows if the relevant discount rate is 9 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) b. What is the profitability index if the discount rate is 14 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) c. What is the profitability index if the discount rate is 25 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)Consider the following cash flows: Year Cash Flow 0 -$ 29,500 1 14,200 2 3 14,700 11,100 a. What is the profitability index for the cash flows if the relevant discount rate is 10 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. b. What is the profitability index if the discount rate is 15 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. c. What is the profitability index if the discount rate is 22 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. a. Profitability index b. Profitability index c. Profitability indexConsider the following cash flows: Year Cash Flow 0 -$ 28,900 1 14,800 2 3 14,100 10,500 a. What is the profitability index for the cash flows if the relevant discount rate is 8 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161 b. What is the profitability index if the discount rate is 13 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161 c. What is the profitability index if the discount rate is 20 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161 Answer is not complete. 0.181 × a. Profitability index b. Profitability index c. Profitability index