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- 2. A potential software project will cost $17000 now, $2000 one year from now, $1000 2 years from now, and $1000 3 years from now. It will provide benefits of $28000 after it is installed 1 year from now, $30000 2 years from now, and $35000 3 years from now. Calculate the Present Value of the costs and benefits for each year and the overall Net Present Value of the project. Use a discount rate of 3%. (Hint: set up a spreadsheet...) Year 0 SO ? Benefits PV of Benefits Costs PV of Costs ? $17,000 Year 1 $28,000 ? Show Transcribed Text $2,000 ? Year 2 $30,000 ? $1,000 ? Year 3 $35,000 ? $1,000 ? Net Present Value (NPV) = Total PV of Benefits - Total PV of Costs Total Benefits Total Costs 3. The Payback Period is the length of time required to recover the cost of an investment. Management uses Payback Period to assess the risk of an investment - the longer the Payback Period, the higher the investment risk. What is the Payback Period for the project in question #2 above? 4. What is the ROI…Suppose a project with a 6% discount rate yields R5000 for the next three years. Annual operating costs amount to R1000 for each year, and the one time initial investment cost is R8000. a. Calculate the Net Present Value (NPV) of this project.b. Calculate the cost-benefit ratio for the project. c. Is the project acceptable? Motivate your answer.5. Compare the following two alternatives by the IRR method, given MARR of 6%/year. First find if they are feasible and then compare them with the incremental rate of return (AROR). Alt. Benefits S/yr Salvage S Service Life (ys) Construction cost $ 410,000 55,000 20,000 11 B 250,000 35,000 10,000 11
- 1. An ICT project has the following characteristics: annual costs are committed at the beginning of each year, and these are the only costs during the year. Cost at the beginning of year Value (KSh.) 1 250,000 2 300,000 650,000 4 450,000 5 400,000 Total 2,050,000 It is anticipated that when the project is completed at the end of year 5 it will generate an income of KSh. 3,200,000. What would be the internal rate of return (IRR)? Use the shown discount table. Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 20% 25% 30% 0943 0917 0.842 0.833 1 0.962 0952 0.935 0.926 0.909 0.901 0.893 0.885 0877 0.870 0.769 0.800 0.640 2 0.925 0.907 0.890 0.873 0.857 0.826 0.812 0.797 0.783 0.769 0.675 0.592 0.756 0.694 0.592 0.751 0.683 0.693 0.613 0.543 0.480 3 0.889 0.855 0.864 0.823 0.840 0.792 0.816 0.763 0.794 0.735 0.772 0.708 0.731 0.659 0.712 0.636 0.658 0.572 0.579 0.512 0.410 0.455 0.350 0.482 5 0.784 0.746 0.711 0.497 0.432 0.376 0.327 0.284 0.269 0.207 0.159 0.123 0.094 0.073 0.822 0.747…Given Problem: A. If money is worth 17.383%, what is the Total Annual Cost of Machine B (using Annual Worth Method)? B. Which of the two machines is more economical?Please help me with this question (picture below) 1. Calculate the payback period, accounting rate of return, net present value of each project. Based on your calculations, discuss whether the projects should go ahead. Assume that the target value for payback is 3 years for project A and 2 years for project B.2. List advantages and disadvantages of payback period, accounting rate of return, net present value of each project.
- Compute the IRR, NPV, Pi, and payback period for the following two projects. Assume the required return is 10%. Year Project A Project B 0 $-200 $-150 1 $200 $50 2 $800 $100 3 $-800 $150 Please show inputs from the BAII Plus Financial calculator of how to get these answers(a) A project management consultant estimated that if a particular project was completed, t years after completion, N thousand persons would benefit directly from the project, where N(t) = 4.5t2 + 16t, 0st< 10 For what value of t, will the largest number of people receive direct benefits?Suppose you are considering a project has an initial cost of $600 that has an ongoing benefit of $ 250. Further, there is an ongoing cost that is equal to $90, which increases by 10% each year ( compounding). Assume the project lasts 6 years. If the appropriate discount rate is 6%. Calculate: a) the Net Present Value = $ Blank 1 b) the Benefit Cost Ratio Blank 2 c) should the project be accepted or rejected? Explain your answer using the information from part a) and b). Answer = Blank 3 (accept/reject) provide your answers to two decimal places. Do not include any commas (,) "$" or "%" in your answers. Ensure you show all your working in your spreadsheet. (best show with excel)
- a) Calculate the payback period for each project. The maximum allowable payback period setby the company for all projects is 3 years. b) Calculate the net present value (NPV) for each project c) Calculate the profitability index (PI) for each project d) Calculate the internal rate of return (IRR) for each project. e) Based on the answer in (a) – (d), explain briefly which project should be accepted. f) If the project is independent project, how would your answer change in part (e) Note: I need only e,f no question answer. only e and fa) Calculate the payback period for each project. The maximum allowable payback period setby the company for all projects is 3 years. b) Calculate the net present value (NPV) for each project c) Calculate the profitability index (PI) for each project d) Calculate the internal rate of return (IRR) for each project. e) Based on the answer in (a) – (d), explain briefly which project should be accepted. f) If the project is independent project, how would your answer change in part (e) Note: 1. I need only e,f no question answer. only e and f 2. No need excel formulaSuppose you are considering a project has an initial cost of $500 that has an ongoing benefit of $250. Further, there is an ongoing cost that is equal to $90, which increases by 10% each year (compounding). Assume the project lasts 6 years. If the appropriate discount rate is 6%. Calculate: a) the Net Present Value = $Blank 1 b) the Benefit Cost Ratio = Blank 2 c) should the project be accepted or rejected? Explain your answer using the information from part a) and b). Answer =Blank 3 (accept/reject) Provide your answers to two decimal places. Do not include any commas (,) "$" or "%" in your answers. Ensure you show all your working in your spreadsheet.