Periods 1%Period 1Period 2Period 3Period 4Period 5Period 6Period 7Period 8Period 9Period 10Period 11Period 12Period 13Period 14Period 15Period 16Period 17Period 18Period 19Period 20Present Value of Ordinary Annuity of $10.990 0.9802% 3%0.9711.9134%0.9621.8863.902 3.808 3.717 3.630 3.546 3.465 3.3874.853 4.713 4.580 4.452 4.329 4.212 4.1006.728 6.4725% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20%0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.8331.970 1.9421.859 1.833 1.808 1.783 1.759 1.736 1.690 1.647 1.626 1.605 1.566 1.5282.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.402 2.322 2.283 2.246 2.174 2.1063.312 3.240 3.170 3.037 2.914 2.855 2.798 2.690 2.5893.993 3.890 3.791 3.605 3.433 3.352 3.274 3.127 2.9915.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.111 3.889 3.784 3.685 3.498 3.3266.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 4.160 4.039 3.812 3.6057.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.487 4.344 4.078 3.8378.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.328 4.946 4.772 4.607 4.303 4.0319.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 5.019 4.833 4.494 4.19210.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.938 5.453 5.234 5.029 4.656 4.32711.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.194 5.660 5.421 5.197 4.793 4.43912.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 7.103 6.424 5.842 5.583 5.342 4.910 4.53313.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 5.724 5.468 5.008 4.61113.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 6.811 6.142 5.847 5.575 5.092 4.6758.851 8.313 7.824 6.974 6.265 5.954 5.669 5.162 4.7309.122 8.544 8.022 7.120 6.373 6.047 5.749 5.222 4.7759.372 8.756 8.201 7.250 6.467 6.128 5.818 5.273 4.8129.604 8.950 8.365 7.366 6.550 6.198 5.8779.818 9.129 8.514 7.469 6.623 6.259 5.9295.316 4.8445.353 4.8707.562 6.687 6.312 5.973 5.3844.8917.645 6.743 6.359 6.011 5.410 4.9097.718 6.792 6.399 6.044 5.432 4.9257.784 6.835 6.434 6.073 5.451 4.937Period 21Period 22Period 23Period 2410.838 10.106 9.44711.274 10.477 9.76311.690 10.828 10.05913.134 12.085 11.158 10.33612.462 11.470 10.59418.857 17.011 15.415 14.029 12.821 11.764 10.836 10.017 9.292 8.64919.660 17.658 15.937 14.451 13.163 12.042 11.061 10.201 9.442 8.77220.456 18.292 | 16.444 14.857 13.489 12.303 11.272 10.371 9.580 8.88321.243 18.914 | 16.936 | 15.247 | 13.799 12.550 11.469 | 10.529 | 9.707 | 8.98514.718 13.578 12.561 11.65215.562 14.292 13.166 12.16616.398 14.992 13.754 12.65917.226 15.678 14.32418.046 16.351 14.877 13.590 Use the NPV method to determine whether Kyler Products should invest in the following projects:Project A: Costs $280,000 and offers seven annual net cash inflows of $52,000. Kyler Products requires an annual return of 12% on investments of this nature.Project B: Costs $385,000 and offers 9 annual net cash inflows of $75,000. Kyler Products demands an annual return of 10% on investments of this nature.(Click the icon to view Present Value of $1 table.)(Click the icon to view Present Value of Ordinary Annuity of $1 table.)Read the requirements.Requirement 1. What is the NPV of each project? Assume neither project has a residual value. Round to two decimal places. (Enter any factor amounts to three decimal places, X.XXX. Useparentheses or a minus sign for a negative net present value.)Caclulate the NPV (net present value) of each project. Begin by calculating the NPV of Project A.Project A:Years1-70Present value of annuityInvestmentNet present value of Project ACalculate the NPV of Project B.0Project B:Years1-9 Present value of annuityInvestmentNet present value of Project BNet CashInflowNet CashInflowAnnuity PV Factor(i=12%, n=7)Annuity PV Factor(i=10%, n=9)PresentValuePresentValue

NPV = Cash flow / (1 + i)^t – initial investment Net Present value = Present value (PV) of a…

Requirement 1. What is the NPV of each project? Assume neither project has a residual value. Round to two decimal places. (Enter any factor amounts to three decimal place parentheses or a minus sign for a negative net present value.) Caclulate the NPV (net present value) of each project. Begin by calculating the NPV of Project A. Project A: Years 1-7 Present value of annuity 0 Investment Net present value of Project A Calculate the NPV of Project B. Project B: Years 1-9 0 Present value of annuity Investment Net present value of Project B Net Cash Inflow Net Cash Inflow Annuity PV Factor (i=12%, n=7) Annuity PV Factor (i=10%, n=9) Present Value Present Value

Requirement 1. What is the NPV of each project? Assume neither project has a residual value. Round to two decimal places. (Enter any factor amounts to three decimal place parentheses or a minus sign for a negative net present value.) Caclulate the NPV (net present value) of each project. Begin by calculating the NPV of Project A. Project A: Years 1-7 Present value of annuity 0 Investment Net present value of Project A Calculate the NPV of Project B. Project B: Years 1-9 0 Present value of annuity Investment Net present value of Project B Net Cash Inflow Net Cash Inflow Annuity PV Factor (i=12%, n=7) Annuity PV Factor (i=10%, n=9) Present Value Present Value

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Using the below informtion answer: 5.1 Payback Period of Project Tan (expressed in years, months and days). 5.2 Net Present Value of Project Tan.5.3 Accounting Rate of Return on average investment of Project Tan (expressed to two decimal places). INFORMATIONThe management of Mastiff Enterprises has a choice between two projects viz. Project Cos and Project Tan, each ofwhich requires an initial investment of R2 500 000. The following information is presented to you: PROJECT COS PROJECT TANNet Profit Net ProfitYear R1 130 000 80 0002 130 000 180 0003 130 000 120 0004 130 000 220 0005 130 000 50 000A scrap value of R100 000 is expected for Project Tan only. The required rate of return is 15%. Depreciation is calculatedusing the straight-line method.
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NPV and IRR Analysis Cummings Products Company is considering two mutually exclusive investments whose expected net cash flows are as follows: EXPECTED NET CASH FLOWS Year Project A Project B -$340 -$630 -528 210 -219 210 3. -150 210 4. 1,100 210 820 210 6. 990 210 7. -325 210 a. Construct NPV profiles for Projects A and B. Select the correct graph. VPVS) 1400 VPVS) VPVS) 1400 1400 1200 1200 1200+ 1000 1000 1000 800 Project B 800 Pioject A 800+ C1
When calculating the annual rate of return, the average investment is equal to initial investment divided by life of project. (initial investment plus $0) divided by 2. (initial investment plus salvage value) divided by 2. initial investment divided by 2.
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Calculate the NPVs of both Project X and Project Y. Show the NPVs for each project. If the Projects are Independent which would you approve? If the Projects are Mutually Exclusive which would you approve?
1. What is the project’s net present value? 2. What is the project’s internal rate of return to the nearest whole percent? 3. What is the project’s simple rate of return?
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