please answer Q1A project manager is using the net present value method to make the final decisionon which project to undertake. The company has a 15% required rate of return andexpects a 5% rate of inflation for the following four years. What is the NPV of aproject that has cash flows of 50,000, 80,000, 100,000 and 150,000 for the first tofourth year respectively. The capital injection is 350,000. All figures are in RinggitMalaysia (RM).

The NPV OR Net Present Value method is used to evaluate capital budgeting decisions by calculating…

Answered: Q1 A project manager is using the net…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 30P

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2. A city is holding an annual marathon event and wants to produce t-shits. Alfonso was able to obtain previous years' demand and probability data as given in below table. The selling price is $10, cost is $5, and the salvage value is $1. Calculate all payoff numbers in the table and profit. Show work. How many shirts should they prepare? Prepare 1000 Prepare 2000 Prepare 3000 Demand=1000| Demand=2000 Demand=3000 30% 35% 35% Profit I
Rare Agri-Products Ltd. is considering a new project with a projectedlife of seven (7) years. The project falls under the government’ssubsidy program for encouraging local agricultural products and iseligible for a one-time rebate of 25% on any initial equipmentinstalled for the project. The initial equipment (IE) will cost$41,000,000. At the end of year 1, An additional equipment (AE) costing$3,500,000 will be needed at the end of year 3. At the end of seven(7) years, the original equipment, IE, will have no resale value butthe supplementary equipment, AE, can be sold for $50,000. A workingcapital of $1,350,000 will be needed.The project is forecast to generate sales of agri-products over theseven years as follows:Year 1 70,000 unitsYear 2 100,000 unitsYears 3-5 250,000 unitsYears 6-7 325,000 unitsA sale price of $150 per unit for the first two years is expected andthen decline to $90 per unit thereafter as the newness of the productloses some sheen. The variable expenses will amount…
Contingency plans usually cover three areas. Namely, (a) Start up programme. (b)Operational programme, (c) Market Analysis programme. Describe in full details, Operational and Market Analysis programme
Rare Agri-Products Ltd. is considering a new project with a projectedlife of seven (7) years. The project falls under the government’ssubsidy program for encouraging local agricultural products and iseligible for a one-time rebate of 25% on any initial equipmentinstalled for the project. The initial equipment (IE) will cost$41,000,000.An additional equipment (AE) costing$3,500,000 will be needed at the end of year 3. At the end of seven(7) years, the original equipment, IE, will have no resale value butthe supplementary equipment, AE, can be sold for $50,000. A workingcapital of $1,350,000 will be needed.The project is forecast to generate sales of agri-products over theseven years as follows:Year 1 70,000 unitsYear 2 100,000 unitsYears 3-5 250,000 unitsYears 6-7 325,000 unitsA sale price of $150 per unit for the first two years is expected andthen decline to $90 per unit thereafter as the newness of the productloses some sheen. The variable expenses will amount to 30% of salesrevenue.…
You are working on a manufacturing project having a budget of PKR 3,600,000 and expected time of its completion is one year. There is an ideal condition that your budget and work are evenly spread across the duration of the project that is twelve month. At the end of forth month, the senior management has called a meeting and invited all the stakeholders to brief about the status of the project. You being the PM of this project is giving the presentation to all the attendees and informed that project is on schedule and PKR 1,800,000 have already been spent on the project. Required: Calculate Cost and Schedule Variance What is SPI and CPI of the project? Estimate at completion and Estimated time to complete?
Answer all the following questions based on Table 2 (a) Feasibility studies for a project is an early study before the project begins. List and briefly explain the feasibility processes. (b) Walkers Corporation is analyzing three capital projects with expected cash flows given in the Table 2 below. Each cash flow with an estimated of five years life and four year life. Interest rate of the cash flows is 10 % per annum. The Walkers Corporation uses investment appraisal techniques which is Payback Method. Analyze the appropriate calculations under the investment techniques stated above and give reasons for your investment advice. Table 2 Year Projects / Cash Flow (RM) Delta Gamma Beta 0 (250,000) (450,000) (650,000) 1 60,000 110,000 150,000 2 60,000 130,000 150,000 3 60,000 160,000 150,000 4 60,000 190,000 150,000 5 60,000 - 150,000
2. A toy manufacturer has three different mechanisms that can be installed in a doll that it sells. The different mechanisms have three different setup costs (overheads) and variable costs and, therefore, the profit from the dolls is dependent on the volume of sales. The anticipated payoffs are as follows. Light Demand 0.25 $325,000 $300,000 -$400,000 Heavy Demand 0.3 Probability Wind-up action Pneumatic action Electrical action Moderate Demand 0.45 $190,000 $420,000 S170,000 $400,000 $800,000 $240,000 a. What is the EMV of each decision alternative? b. Which action should be selected? c. What is the expected value with perfect information? d. What is the expected value of perfect information? e. What is the expected opportunity loss?
Thank you for the insight. In such a question, does the fact that certain data in terms of amounts involved, require any calculations a regards fully appraising this PPP? considering this portion of the question with the referred data provide "The total project cost is US$ 649,976,167, broken down as follows: (a) US$ 577.38 million is the total cost of construction; (b) US$ 1,000,000 for working capital; (c) US$ 1,849,500 for finance costs; and (d) US$ 69.74 million) for interest during the construction period. Using the six factor characteristic model highlighted for a successful implementation of a PPP, appraise the Dual Carriage Way PPP." or we are safe to overlook this?
You are given the following payoff table (in K million), about a cooking oil producer in Lusaka. The company is researching for its 2019 budget production levels. High Demand Average Demand Low Demand Produce 30,000 39 5 -13 Produce 20,000 28 12 9 Produce 12,000 13 4 -10 Probability ? 0.5 0.2 Required: a) Explain the meaning of 39 and -10 in the payoff table. b) What are the expected payoffs for each production level? (Note that you will have to determine the missing probability). c) What is the expected payoff under perfect information? d) How much should the company invest in further market research to obtain perfect information
The Role of Income Taxes For the most recent year, Triad Company had fixed costs of $240,000and variable costs of 75% of total sales revenue, earned $70,000 of net income after taxes, and anincome tax rate of 35%.Required Determine:1. Before-tax income.2. Total contribution margin.3. Total sales.4. Breakeven point in dollar sales
Sheet 9: Q8 Planning model Q8. Use below table to to find the profit of the company, (production plan is 3000) Y slope 2500 2000 5500 65000 7500 95000 Unit price 15.5 Units 3000 Fixed cost 19000 Y(pkp) X(pkp) alope Var cot sotal cost Sale
You are working on a manufacturing project having a budget of PKR 3,600,000 and the expected time of its completion is one year. There is an ideal condition that your budget and work are evenly spread across the duration of the project that is twelve months. At the end of the fourth month, the senior management has called a meeting and invited all the stakeholders to brief about the status of the project. You being the PM of this project are giving the presentation to all the attendees and informed them that the project is on schedule and PKR 1,800,000 has already been spent on the project. Calculate Cost and Schedule Variance What is SPI and CPI of the project? Estimate at completion and Estimated time to complete?

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