Nikita Berhad is evaluating a project which expected to earn a series of cash inflows as shown in the table below. The initial investment of this project is RM52,300. If the required rate of return is 12 percent, determine whether this project is profitable or loss by calculating the net present value and profitability index techniques.

Q: Fijisawa Inc. is considering a major expansion of its product line and has estimated the following…

A: NPV = Present value of cashflows - Initial outlay PI = Present value of cashflows /Initial outlay

Q: What is the profitability index of this project?

A: Profitability index is one of the capital budgeting method which helps in rejecting or accepting the…

Q: a firm is analyzing a project that is expected to have an annual cash flows of 46,400, 51,300, and…

A: MIRR stands for modified internal rate of return. In the discounting approach we discount all the…

Q: You have a project that has an initial cost of $675,000. It is expected to earn $82,000 annually for…

A: Initial Cost = $675,000 Annual cash flow = $ 82,000

Q: You are considering an investment for which you require a rate of return of 8.5 percent. The…

A: Companies have different alternatives to invest their money in, but they should always compare the…

Q: NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is…

A: Step 1: Given Value for Calculation Initial Investment = i = $28,570Cash Flow = cf = $3000Time = t =…

Q: ATL International evaluates capital projects using the net present value, internal rate of return,…

A: Part 2: Explanation:Step 1: Calculate NPV using the formula:\[ NPV = \sum \left( \frac{CF_t}{(1 +…

Q: Assuming you are facing making a decision on a large capital investment proposal. the capital…

A: To find the answers, we will first have organize the cashflows associated with the project. Please…

Q: (a) Compute the profitability index for each project. (b) Based on the profitability index, which…

A: It's a method of capital Budgeting.  It helps us to know whether a project must be accepted or…

Q: Company A is evaluating two investment projects: Project X and Project Y. The initial investment for…

A: The profitability index, also known as the profit investment ratio or value investment ratio, is a…

Q: A. Calculate the internal rate of return on both projects. Use the IRR spreadsheet function to…

A: Internal rate of return(IRR): It is  the discount rate which makes the net present value (Difference…

Q: Calculate the payback period for each project and identify the project in which the company should…

A: The payback period is used to find out the time required by the project to recoup its initial…

Q: Ingram Electric is considering a project with an initial cash outflow of $800,000. This project is…

A: The MIRR is one of the modified tools used under the capital budgeting process where long-term…

Q: The CEO asked you to take charge of the following projects for the company. However, he told you…

A: Profitability index is a measure of financial index which is used to measure how profitable a…

Q: Your company is considering a capital project that will require a net initial investment of…

A: Solution:- Internal Rate of Return (IRR) means the rate of return the project is yielding. At IRR,…

Q: Calculate the net present value of a project which requires an initial investment of OMR 300,000 and…

A: Net present value is the current value of future cash flow considering the time value of money.

Q: Roman Knoze is considering two investments. Each will cost $20,000 initially. Project 1 will return…

A: The correct option is option c.

Q: Fijisawa, Inc. is considering a major expansion of its product line and has estimated the following…

A: NPV -  Net Present Value is the net of present value of cash inflow in future and cash outflow…

Q: can purchase a new assembler for $15,052 that will provide an annual net cash flow of $6,000 per…

A: The analysis of capital budgeting this season involverine strike for technique and the most commonly…

Q: Use the NPV method to determine whether Kyler Products should invest in the following projects: •…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: You have been asked to analyze two investment proposals, A and B. Project A’s cost is RM80,000 and…

A: Since more than three sub-parts are asked at a time. The answer for first three sub-parts is…

Q: Dundonald Inc. has identified an investment project with the following cash flows. If the discount…

A: Future value of stream of uneven cash flows at different discount rate is calculated in excel

Q: Ariake Inc. is considering a major expansion of its product line and has estimated the following…

A: Note :- According to bartleby guidelines , if question involves multiple subparts , then 1st sub 3…

Q: Which of the following statements is true? The internal rate of return is the rate of return of an…

A: The internal rate of return (IRR) is the annual rate of growth that an investment is expected to…

Q: Nikita Berhad is evaluating a project which expected to earn a series of cash inflows as shown in…

A: Net present value refers to the excess of the present value of cash inflows over the outflows. It is…

Q: There are two projects under consideration by the Rainbow factory. Each of the projects will require…

A: The term internal rate of return or IRR refers to the rate of return at which the NPV of a project…

Q: Fijisawa Inc. is considering a major expansion of its product line and has estimated the following…

A: The difference between the current value of cash inflows and outflow of cash over a period of time…

Q: You are evaluating a project with the following cash flows. Year 1 5% ? = $30 and year 2 = $90. The…

A: The objective of the question is to understand the impact of an increase in the discount rate on the…

Q: You are evaluating a project with the following expected cash flows: an initial investment of $7…

A: We are given the following data for the Project -Cash FlowsCash Flows (in millions)Year…

Q: Fijisawa Inc. is considering a major expansion of its product line and has estimated the following…

A: NPV -  Net Present Value is the net of present value of cash inflow in future and cash outflow…

Q: NPV and IRR   Benson Designs has prepared the following estimates for a​ long-term project it is…

A: NPV is the difference between the sum of the present values of all future cash inflows and the sum…

Q: Calculate the net present value (NPV) of the project.

A: Net Present Value: Net present value is the sum of discounted value of all the cash flows during a…

Q: There are two projects under consideration by the Rainbow factory. Each of the projects will require…

A: IRR stands for Internal Rate of Return, which is a financial metric used to evaluate the…

Q: Kessben Ltd, is considering a major expansion of its product line and has estimated the following…

A:

Q: firm is evaluating a proposal which has an initial investment of Php 35,000 and has cash flows of…

A: Payback period is the no. of years required to recover the initial amount invested.

Q: Shaylee Corporation has $2.00 million to invest in new projects. The company's managers have…

A: Profitability index:-This method measure the ratio between the present value of future cash flows…

Q: Find the modified internal rate of return (MIRR) for a proposed project costing $5,489. Assume that…

A: MIRR stands for Modified Internal Rate of Return. It is a financial metric used in capital budgeting…

Q: A project that requires an initial investment of $340,000 is expected to have an after-tax cash flow…

A: We will use and apply the concepts of capital budgeting and use different tools of capital budgeting…

Q: Consider two investments with the following sequences of cash flows: (a) Compute the i* for each…

A: IRR is the rate at which NPV of the project is equal to zero or PV of cash inflows is equal to PV of…

Q: FB Company is considering investing in two construction projects, and he developed the following…

A: Capital budgeting techniques helps a company to select among the alternative available investment to…

Q: Benson Designs has prepared the following estimates for a​ long-term project it is considering. The…

A: Net present value is computed as present value of cash inflows less initial investment.Internal rate…

Q: NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is…

A: Net present value technique is a method to evaluate the profitability of a potential project. A…

Q: Garfield Inc is considering a new project that requires an initial investment of $37,700 and will…

A: Given: Initial investment = $37,700 Profitability index = 1.8

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.