The initial investment of a project is OMR 50,000. The profit after interest and tax (Cash inflows) for Year 1 is OMR 30,000 and for Year 2 is OMR 34,000. The scrap value is OMR 4,000 and the discount rate is 10%. (The present value of OMR 1 at 10% discount factor for year 1 is 0.909 and Year 2 is 0.826). In this case, the Net present Value (NPV) of the project is: O a. OMR 8,658 O b. OMR 5,354 O c. OMR 2,050 O d. None of these

The initial investment of a project is OMR 50,000. The profit after interest and tax (Cash inflows) for Year 1 is OMR 30,000 and for Year 2 is OMR 34,000. The scrap value is OMR 4,000 and the discount rate is 10%. (The present value of OMR 1 at 10% discount factor for year 1 is 0.909 and Year 2 is 0.826). In this case, the Net present Value (NPV) of the project is: O a. OMR 8,658 O b. OMR 5,354 O c. OMR 2,050 O d. None of these

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Duo Corporation is evaluating a project with the following cash flows. The company uses a discount rate of 10 percent and a reinvestment rate of 7 percent on all of its projects. Year 0 1 Cash Flow -$ 15,400 6,500 7,700 7,300 6,100 -3,500 Calculate the MIRR of the project using all three methods with these interest rates. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Discounting approach Reinvestment approach Combination approach % % %
Duo Corporation is evaluating a project with the following cash flows: Year 0 1 2 3 4 5 Cash Flow -$ 15,300 6,400 7,600 7,200 6,000 -3, 400 The company uses an interest rate of 9 percent on all of its projects. Calculate the MIRR of the project using all three methods. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Discounting approach Reinvestment approach Combination approach % % %
Monroe, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this project. Cost and cash flows are shown in the table. What is the NPV of the project? Year0 ($11,368,000)1 $2,112,5892 $3,787,5523 $3,300,6504 $4,115,8995. $ 4,556,424 Round to two decimal places. For year 0 , its initial investment .
A company is considering two projects. The discount rate is 10 percent, and the projects' cash flows would be: Years 1 2 3 Project A -$700 S500 S300 s100 Project B -$700 $100 $300 | $600 a. Calculate the projects' NPVS. b. If the two projects are independent, which project(s) should be chosen? c. If the two projects are mutually exclusive, which project should be chosen?
Monroe, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this project. Cost and cash flows are shown in the table. What is the NPV of the project? Year Project 0 ($11,368,000) 1 $ 2,127,589 2 $ 3,787,552 3 $ 3,125,650 4 $ 4,115,899 5 $ 4,556,424 Round to two decimal places.
Mansukhbhai
Nikul
A project requires an increase of $2100 in Net Working Capital at the beginning of the project, which will be fully recovered after the completion of the project. Equipment with a book value of $11,000 will be sold at the end of the project for a salvage value of $6,000. The tax rate is 20%. What is the incremental free cash flow in the year following the end of the project? Question 3Answer a. $9100 b. $7100 c. $4900 d. $2900
A certain dam costs P400,000 and will serve the purpose for 20 years. At the end of that time it must be enlarged at a cost of P200,00O. If the dam had been built larger than originally, the cost would have been P500,000. Bonds pay interest at the rate of 5% per annum and the interest paid annually. Compare the two alternatives and calculate the saving or loss. O The first alternative is better O The second alternative is better
A potential project involves an initial investment in machinery of RO.1,000,000 and has the following cash inflows:Year 1 – RO.250,000Year 2 – RO.350,000Year 3 – RO.200,000Year 4 – RO.400,000At the end of year 4, the machinery will be sold for RO.600,000.Calculate the accounting rate of return based on average investment.NOTE (DEDUCT THE DEPRECIATION TO ARRIVE AT THE CORRECT AVERAGE PROFIT) a. None of the options b. 35% c. 20% d. 25% Clear my choice
For project A, the cash flow effect from the change in net working capital is expected to be $490.00 at time 2 and the level of net working capital is expected to be $750.00 at time 1. What is the level of current assets for project A expected to be at time 2 if the level of current liabilities for project A is expected to be $2,600.00 at time 2? $2,860.00 (plus or minus $10) $3,840.00 (plus or minus $10) $1,360.00 (plus or minus $10) $2,340.00 (plus or minus $10) None of the above is within $10 of the correct answer
Based on the picture, Calculate: a) The payback period for the project b) The discounted payback period for the project c) The net present value for the project Please help me ASAP. Thank you. I'm tryna do my revision. ?