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- A firm is considering a six-year project with a payback period of 3.5 years. It has cash flows the first three years of $2,000 per year, and cash flows of $1,000 during its last three years. What is the NPV of this project in a 10% "world?" [using a 10% distount rate!] O $2,500 O $881 O $1,097 O $342 O $687. An investment requires an initial disbursement of € 2,500,000 and the duration of the project is 3 years, in the first of which it generates a cash flow of € 1,500,000, in the second € 3,700,000 and the third € 4,100,000. a) Calculate the Net Present Value of the investment, knowing that inflation is 3% cumulative annually and that the required profitability in the absence of inflation is 8%. b) Calculate the actual internal rate of return of the previous investment.An amount of R50000 is invested in a project that predicts the quarterly cash flow return over the next four years, given in the table below. Quarters 2 3 4 5 6 9 10 11 12 13 14 15 16 Rands 1500 3000 4500 5600 5900 6400 6600 7200 7800 8000 8100 8500 x i)If the internal rate of return for this cash flow is 21,32% p.a , then the value of the payment (rounded to the nearest cent) at T16 is equal to Blank 1. Fill in the blank, read surrounding text. ii) Using your answer from (i) and the information that the NPV = R4500, see if you can use your IRR function to solve for the bank rate. HINT: Write out the formula for the NPV and then re-arrange it to make it equal to zero. This will give a new "initial investment" value. Put it into the cash flow function and use the IRR to solve for the rate (because the equation is equal to zero). This will actually give you the bank rate. The nominal rate compounded quarterly that is offered by the bank, is equal to Blank 2. Fill in the…
- You are considering investing RM61000 in new equipment. You estimate that the net cash flows will be RM11000 during the first year, but will increase by RM2500 per year the next year and each year thereafter. The equipment is estimated to have a 8-year service life and a net salvage value of RM4800 at that time. Assume MARR of 9%. a.Calculate the annual capital cost CR (ownership cost) for the equipment. Format: 60287 b.Determine the equivalent annual revenue. Format: 77548 c.Is this a wise investment? Y/N. Format: AA company is considering an investment that will cost $759,000 and have a useful life of 6 years. The cash flows from the project are expected to be $450,000 per year in the first two years then $170,000 per year for the last 4 years. If the appropriate discount rate is 16.0 percent per annum, what is the NPV of this investment (to the nearest dollar)? Select one: O a. $316870 O b. $321617 O c. $1834870 O d. $439045A company is considering a project that delivers a constant cash-flow of 60 million SEK for six years where the first cash-flow is received at the end of this year. It requires an initial investment of 1150million SEK. After the first six years the cash-flows will grow at a rate of 1% per yearforever. What is the IRR of this project closest to? in Excel please
- An investment is expected to produce the following annual year-end cash flows:year 1: $5,000 year 4: $5,000year 2: $1,000 year 5: $6,000year 3: $0 year 6: $863.65The investment will cost $13,000 today.a. Will this investment be profitable?b. What will be the IRR (compounded annually) on this investment?c. Prove your answer in (b) by showing how much of each year’s cash flow is the recovery of the $13,000 investment and how much of the cash flow is return on investment. (Hint: See Concept Box 3.2.)An investment project is expected to yield $10,000 in annual revenues, will incur $2,000 in fixed costs per year, and requires an initial investment of $5,000. Given a cost of goods sold of 60% of sales and ignoring taxes, what is the payback period in years? * A. 2.50 B. 2.00 C. 5.00 D. 1.254. A project capitalized for ₱150,000 invested in depreciable assets will earn a uniform, annual income of ₱59, 547 in 10 years. The costs for operation and maintenance total ₱27,000a year, and taxes and insurance will cost 4% of the first cost each year. If the company expects its capital to earn12% before income taxes, is the investment worthwhile? Show by: Rate of return Solve and show the solution.
- Gordo Corporation has a project with the following cash flows. If the project requires an initial investment (today) of $1,000, what is the net present value of the project if the required rate of return (discount rate) is 10.7 percent per year? Year Cash Flow 1 $1,560 2 $1,910 3 $2,185 4 $4,090A project requires a $2 million investment in net working capital (NWC) today, and will be fully recovered in 5 years. What is the PV of the NWC cash flows if r = 0.12 per annum?The company will invest $150,000 in a project and average annual income $50,000. The investment will provide the following inflows: Year Cash inflow 1 $ 25,000 2 45,000 3 30,000 4 50,000 5 70,000 Calculate: Net present value at 15% discount factor. Payback period Accounting rate of return Note: 15% discount factor : Year 15% discount factor 1 0.8696 2 0.7561 3 0.6575 4 0.5718 5 0.4972