Project R delegates all the development work to outside companies. The estimated cashflows for Project R are (where brackets indicate expenditure): Beginning of Year 1 Beginning of Year 2 Beginning of Year 3 End of Year 3 (£150,000) (£250,000) (£250,000) (contractors' fees) (contractors' fees) (contractors' fees) (sales) £1,000,000 Project S carries out all the development work in-house by purchasing the necessary equipment and using the company's own staff. The estimated cashflows for Project S are: Beginning of Year 1 Continuous payments Through Year 1 Continuous payments Through Year 2 Continuous payments Through Year 3 End of Year 3 (£150,000) (£75,000) (£250,000) (£250,000) (New equipment) (Staff Cost) (Staff Cost) (Staff Cost) (sales) £1,000,000 a) Calculate the net present value for Project R and Project S using a risk discount rate of 20% per annum. Using net present values as a criterion, which project is preferable? b) Find the internal rate of return for Project R and Project S and hence determine which project is more favourable using this criterion.

Hello, how can I solve the activity and what is the answer? Martian Corporation, a space vehicle development company, is starting a new division that will develop the next-generation launch missile engine configuration. Use a hand application of the MIRR method to determine the EROR for the estimated net cash flows (in $1000 units) of $-50,000 in year 0, $14,000 in years 1 through 8, and $-2,000 in year 9. Assume a borrowing rate of 14% and an investment rate of 21% per year. What is the external rate of return?

The investment committee of Sentry Insurance Co. is evaluating two projects, office expansion and upgrade to computer servers. The projects have different useful lives, but each requires an investment of $1,104,000. The estimated net cash flows from each project are as follows:   Net Cash Flow Year     OfficeExpansion     Server 1 $308,000       $407,000       2 308,000       407,000       3 308,000       407,000       4 308,000       407,000       5 308,000               6 308,000               The committee has selected a rate of 15% for purposes of net present value analysis. It also estimates that the residual value at the end of each project's useful life is $0, but at the end of the fourth year, the office expansion's residual value would be $385,000. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5…

n Taraz Company has assembled the following dato with respect to eight projects. Project 1: Initial cost $100,000, NPV- $5.000 Project 2: intial cost $104000, NPv 55,150 Pject innal cost $tOR.000 NPV1530 Project 4: Initial cost $110,000; NPV = $5,450 Project 5: Initial cost $98,000, NPV $4950 Project 6 Ininial cost 596.000, NPV S4,900 Project 7. nitial coot S4000, NPVSAASO Paject ntia con po0 MPY $4,700 Taraz Company can only do one of the projects. Which ONE is the BEST? Note: Your calculator needs to display at least 4 digits after the decimal in order to anewer tha question comecty O Project 1 Project 2 Project 3 Project 4 O Project 5 Project 6 Project 7 Project 8 SUMIT ALL ANEWERS

s

he cash flows associated with a public works project in Buffalo, New York, are shown. Use the modified B/C ratio at a discount rate of 5% per year to determine the economic justification.   First cost, $ 30,000,000 AW of benefits, $/year 7,700,000 AW of disbenefits, $/year 1,700,000 M&O costs, $/year        1,525,000 Life of project, years 30   The modified B/C ratio is  . The project is economically         (Click to select) justified not justified  .

Using the following information find the project's cash flow.  Once you have that information find the NPV, PI and IRR.   Cost of new equipt     7,800,000     Installation costs     200,000                 Unit Sales Year Units sold         1             80,000         2           130,000         3           140,000         4             90,000         5             70,000                   Sales price per unit $300 in years 1-4, $250 in year 5     Variable cost per unit $225/unit         Annual fixed costs $225,000 in years 1-5                   Working capital requirements: Initial working capital requirement $100,000     Each year net working capital equal to 10% of the year's sales   All working capital terminated at the end of year 5               Depreciation Bonus depreciation method - all is taken in year 1   Income tax rate 21%         Required rate of return 12%

Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $229,500. Project 2 requires an initial investment of $156,000.  Annual Amounts Project 1 Project 2 Sales of new product $ 148,000 $ 128,000 Expenses     Materials, labor, and overhead (except depreciation) 77,000 44,000 Depreciation—Machinery 32,000 30,000 Selling, general, and administrative expenses 20,000 32,000 Income $ 19,000 $ 22,000 (a) Compute each project’s annual net cash flow.(b) Compute payback period for each investment.

Shaylee Corp has $2.10 million to invest in new projects. The company’s managers have presented a number of possible options that the board must prioritize. Information about the projects follows:    Project A Project B Project C Project D Initial investment $ 720,000 $ 400,000 $ 960,000 $ 1,115,000 Present value of future cash flows   935,000   500,000   1,650,000   1,310,000     Required:1. Is Shaylee able to invest in all of these projects simultaneously?multiple choice No Yes   2-a. Calculate the profitability index for each project. (Round your answers to 4 decimal places.)

How do you calculate net investment in working capital, net cash flows, present value of net cash flows, and NPV? WACC is 10.10%