The company recently invested in a project that has an expected annual cash inflow of P700,000 for 10 years, and an expected payback period of 3.6 years. How much did the company invest in the project?
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- CII, Inc., invests $630,000 in a project expected to earn a 12% annual rate of return. The earnings will be reinvested in the project each year until the entire investment is liquidated 10 years later. What will the cash proceeds be when the project is liquidated?Schinhorn Inc. is investing £500,000 in a new project. The project will last four years. The net cash inflows from the project are expected to be £75,000 in year 1, £200,000 in year 2, £300,000 in year 3, and £350,000 in year 4. Assuming cash flows arise evenly through the year, what is the payback period of this investment? O 3 years O 3 years 6 months O 3 years 3 months O 2 years 9 monthsA company is considering the purchase of a new piece of equipment for P900,000. Predicted annual cash inflows from this investment are P360,000 (year 1), P300,000 (year 2), P180,000 (year 3), P150,000 (year 4) and P60,000 (year 5). The payback period is:
- An equipment which can be purchase for P700,000 is expected to generate a net cash flow of P200,000 annually for five years which is the estimated service life of the equipment. Its salvage value at the end of the service life is estimated to be 5% of its purchased cost. a. What is the rate of return of the initial investment? b. What is the simple pay-back period? c. If the company's minimum attractive rate of return(MARR) is set at 15%, using NPW is this investment acceptable? d. What is the internal rate of return(IRR) of this machine? e. What is the external rate of return(ERR) at the 15% MARR?Salalah Foods has invested in new machinery at a cost of 1450000 OMR. This investment is expected to produce cash flows of 640000 OMR, 715250 OMR, 823330 OMR, and 907125 OMR over the next four years. What is the payback period for this project?Starwood Ltd is considering to invest in a new project. The project is expected to generate cash flows of $1,000 every four years forever with the first cash flow starting in year 2 and $4,000 every four years forever with the first cash flow starting in year 4. Suppose similar investments are paying a return of 10% p.a. compounded quarterly. How much should Starwood Ltd be prepared to pay for this project? $10,732.18 $10,235.32 $10,770.56 $11,697.21 $11,255.51
- Kumi Ltd is considering an investment in a project, which requires an immediate payment of GHS15,000, followed by a further investment of GHS5,400 at the end of the first year. The subsequent return phase net cash inflows are expected to arise at the end of the following years: Year 1 2 3 4 5 Cash inflow (GHS) 6,500 7,750 5,750 4,750 3,750 You are required to estimate the internal rate of return of this project assuming the company’s cost of capital is 16%.GTO Inc. is considering an investment costing $214,170 that results in net cash flows of $30,000 annually for 11 years. (a) What is the internal rate of return of this investment? (b) The hurdle rate is 9.5%. Should the company invest in this project on the basis of internal rate of return?Salalah Foods has invested in new machinery at a cost of 1450000 OMR. This investment is expected to produce cash flows of 640000 OMR, 715250 OMR, 823330 OMR, and 907125 OMR over the next four years. What is the payback period for this project? Select one: a. 1.63 years b. 2.11 years c. 1.34 years d. 2.42 years e. None of these
- XYZ Inc. is evaluating a project with an initial investment at Time 0 of $925,000. The present value of the levered cash flows is $875,000 and the net present value of the project is $250. How much was invested in the project from borrowing?ABC Corporation made a net investment of P500,000 in a vending machine. Over the five years of its useful life, the machine is expected to have net cashflows of P250,000, P200,000, P80,000, P75,000 and P50,000. Based on those information, what is the payback period in years of the vending machine?Siemens AG invests €80 million to build a manufacturing plant to build wind turbines. The company predicts net cash flows of €16 million per year for the next eight years. Assume the company requires an 8% rate of return from its investments. 1. What is the payback period of this investment? 2. What is the net present value of this investment?