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Consider the following two mutually exclusive investment projects:
Which project would you select if you used the infinite planning horizon with
project repeatability likely (same costs and benefits) based on the PW criterion? Assume that i = 12%.
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- The following information is provided by Doppler Systems: Project A Project B Project C Project D Initial investment $440,000 $202,000 $550,000 $506,000 PV of cash inflows $570,000 $394,000 $816,000 $406,000 Payback period (years) 3.6 3.2 4.0 20 NPV of project $130,000 $192,000 $266,000 $100,000 Calculate the profitability index for Project A. (Round your answer to two decimal places.) 1.09 1.67 0.85 1.30The following are a project's cash flows. What is the projects year - 110155450 cash flows - 9.70% 5. 14.660%. 8.64% 10.78% . =. 16.94% IBR? $450 $40 3 8490Year Investment $13,000 $10,000 Cash Inflow $1,000 $2,000 $2,500 $4,000 $5,000 $4,000 $5,000 $4,000 $3,000 $2,000 Determine the Payback Period. 1234567899
- 5.The following information is provided by Pemberton Systems: Project A $434,000 $572,000 3.6 Project B $200,000 $396,000 Project C Project D Initial investment PV of cash inflows $568,000 $510,000 $808,000 $402,000 4.0 Payback period (years) NPV of project 3.2 2.0 $138,000 $196,000 $240,000 $108,000 Which project has the highest profitability index?Project A cost $6,000 and Project B cost $18,000, there expected net cash inflows are shown on the timeline below and there interest rate is 14 percent.Year Project A Project BYear 0 -$6,000 -$8,000Year 1 $2,000 $5,600Year 2 $2,000 $5,600Year 3 $2,000 $5,600Year 4 $2,000 $5,600Year 5 $2,000 $5,600 What is Project Bs net present value (NPV)? Group of answer choices $5,600.00 $1,800.00 $866.16 $1,225.25The project's NPV? WACC: 10.00% Year 0 1 2 3 Cash flows -$1,000 $450 $460 $470
- Data pertaining to investment proposals is provided below: A B D -$40,000 $57,600 $17.600 Investment required -$260,000 $505,900 $245.900 -$125,000 -$640,000 $224,300 $99.300 6. Present vahue of cash inflows $1.021,400 NPV Usefil lfe of the project $381.400 6 Calculate project profitability index to rank proposals in tem of preference. Answer Choices: Project Investment profitability a. proposal Rank index preference 0.95 0.44 0.79 0.60 A 1st B 4th 2nd 3rd Project Investment profitability ь. proposal Rank preference 1.95 index A 1st B 1.44 4th 1.79 1.60 2nd D 3rd Project Investment profitability proposal Rank index preference 0.49 0.31 A 1st B 4th 0.44 2nd 0.37 3rd Project Investment profitability d. proposal Rank index preference A 1.45 1st B 0.94 4th 1.29 1.10 2nd 3rd DProblem 1: Consider the following cash flows and assume i = 10% for all analyses purposes: Project Cash Flows A D -$2,500 -$7,000 -$5,000 -$5,000 1 $650 -$2,500 -$2,000 -$500 2 $650 -$2,000 -$2,000 -$500 $650 -$1,500 -$2,000 $4,000 4 $600 -$1,500 -$2,000 $3,000 5 $600 -$1,500 -$2,000 $3,000 $600 -$1,500 -$2,000 $2,000 7 $300 -$2,000 $3,000 8 $300 a) Compute the project balances for Projects A and D, as a function of project year b) Compute the future worth values for Projects A and D at the end of service life. c) Suppose that Projects B and C are mutually exclusive. Assume also that the required service period is eight years and that the company is considering leasing comparable equipment that has an annual lease expense of $3,000 for the remaining years of the required service period for both projects. Which project is the better choice?You are given the following cash flow information for Project A TV Inflows Year 0 PV Outflows -$150,000.00 1 Project A -$150,000.00 $80,000.00 -$25,000.00 $50,000.00 2 $80,000.00 -$30,000.00 $75,000.00 Totals 3 4 5 6 O 19.33% $75,000.00 Now assume that the project's cost of capital is 16.0 percent, but that its true reinvestment rate is 24.0 percent. Given this information, determine the project's modified internal rate of return (MIRR). Ⓒ 18.56% 5 pts
- Calculate the present value of a project using the information below: Cash flow ($) -15,000.00 5,000.00 6,000.00 7,000.00 8,000.00 9,000.00 Year 1 3 4 5 Cost of capital is 15%. a. $20,000.00 b. $35,000.00 c. $22,535.92 d. $7,535.92The following project has cash flows as follows: Year Project A 0 -$705,000 1 $225,000 2 $421,500 3 $275,000 What is the IRR?Q6-1 The H Group Inc. has identified the following two mutually exclusive projects: The Hetman Group Year 0 1 2 3 4 Cash flow L -$10,000 $200 $500 $8,200 $4,800 A. What is the IRR for each of these projects? IRR L IRR S Cash flow S -$10,000 $5,000 $6,000 $500 $500 use formula tab, go to Finanical select IRR. If you apply the IRR decision rule, which project should the company accepts? Is this decision necessarily correct? B. If the required return is 9%, use the formula tab, go to financial and select NPV, find NPV with the cash flows not including the initial investmnet, then subtract/add if negative the initial investment. what is the NPV for each of these projects? 0.09 NPV L NPV S Which project will you choose if you apply the NPV decision rule?