I need all solution Which of the of the following most closely approximates what the project's NPV would be when using straight-line depreciation? (Hint: Round yourfinal answer to two decimal places and choose the value that most closely matches your answer.)$55,503.98$67,189.03$58,425.24$73,031.55Using thebonusdepreciation method will result in the highest NPV for the project.No other firm would take on this project if Fox turns it down. Which of the following most closely approximates how much Fox should reduce the NPVof this project, assuming it is discovered that this project would reduce one of its division's net after-tax cash flows by $400 for each year of the four-year project? (Hint: Round your final answer to two decimal places and choose the value that most closely matches your answer.)$744.59$930.74$1,240.98$1,054.83Fox spent $2,250 on a marketing study to estimate the number of units that it can sell each year. What should Fox do to take this information intoaccount?Increase the amount of the initial investment by $2,250.Increase the NPV of the project $2,250.The company does not need to do anything with the cost of the marketing study because the marketing study is a sunk cost.

NPV Reduction due to Decreased Cash Flow:The amount Fox should reduce the NPV due to the decreased…

Answered: Which of the of the following most…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 8QTD

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The management of Nadia Investors has to make a choice between two projects: Project Intensive andProject Primary. Each project will require an initial investment of R2 500 000.INFORMATION Project Intensive Project Primary Net profits Net profitsYear R R1 80 000 130 0002 180 000 130 0003 120 000 130 0004 220 000 130 0005 50 000 130 000 A scrap value of R100 000 is expected for Project Intensive. Depreciation is calculated on thestraightline basis.The required rate of return is 15%.REQUIRED:Use the information provided above to calculate the following:3.1 Payback Period for Project Intensive (answer in years, months and days). 3.2 Calculate Accounting rate of return for Project Primary (answer in two decimal places). 3.3 Net Present Value for Project Intensive. 3.4 Internal Rate of Return for Project Primary using interpolation (answer in two decimalplaces.
We are analyzing a project and have gathered the following data. Based on this data, what is the average accounting rate of return? The project's assets will be depreciated using straight-line depreciation to a zero book value over the life of the project. Year Cash Flow Net Income 0 $285,000 n/a 1 $83,650 $12,400 2 $92,850 $21,600 3 $94,350 $23,100 4 $93,250 $22,000
A Moving to another question will save this response. Question 14 A project to replace an old machine with a new one is under consideration. The new machine costs $1500 and requires an additional working ca $750 salvage value. Calculate the Initial Outlay of this replacement project assuming the book value of the old asset is $1500. The firm's margina O $1,912.50 O $337.50 O $1,837.50 O $1,087.50 O None of the listed choices is correct A Moving to another question will save this response. MacBook Air sc 88 FA F1 F2 F3 F5 F6 @ # $ & 3. 4 5 6 7 Q W T Y S D C V option command
Iggy Company is considering three capital expenditure projects Relevant data for the projects are as follows x Your answer is incorrect Project 22A 23A 24A (a) Project Annual income is constant over the life of the project. Each project is expected to have zero salvage value at the end of the project. Iggy Company uses the straight-line method of depreciation Click here to view the factor table 22A 23A (b) Investment $243,300 274.200 Determine the internal rate of return for each project. (Round answers O decimal places, eg. 1.3%. For calculation purposes, use 5 decimal places as displayed in the factor table provided) 24A 280,500 Annual Income $16,860 20,730 15,700 Internal Rate of Return 10.94 % Life of Project 6 years 9 years 7 years 1186 % 9.02 % If Iggy Company's required rate of return is 11%, which projects are acceptable? The following project(s) are acceptable 23A
National Paints has calculated the Net present Value (NPV) for its new chemical plant project. Net present Value (NPV) = 2500 What decision should National Paint take based only NPV method? Decision cannot be taken Accept the Project Reject the Project Reject or Accept . Amount in NPV is not important
Monty Manufacturing Company is considering three new projects, each requiring an equipment investment of $25,200. Each project will last for 3 years and produce the following cash flows. Year 1 2 3 Total AA (a) 16,000 $8,000 $10,900 $12,000 10,000 BB $34,000 $32,700 10,900 Click here to view PV tables. 10,900 Payback period The salvage value for each of the projects is zero. Monty uses straight-line depreciation. Monty will not accept any project with a payback period over 2.2 years. Monty's minimum required rate of return is 12%. Most desirable Least desirable CC 11,000 Your answer has been saved. See score details after the due date. 10,000 Compute each project's payback period. (Round answers to 2 decimal places, e.g. 52.75.) $33,000 Project CC AA Indicating the most desirable project and the least desirable project using this method. Project AA V 2.72 years BB 2.31 years CC 2.20 years Attempts: 1 of 1 used
Hearne Company has a number of potential capital investments. Because these projects vary in nature, initial investment, and time horizon, management is finding it difficult to compare them. Assume straight line depreciation method is used. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided.) Project 1: Retooling Manufacturing Facility This project would require an initial investment of $4,930,000. It would generate $937,000 in additional net cash flow each year. The new machinery has a useful life of eight years and a salvage value of $1,880,000. Project 2: Purchase Patent for New Product The patent would cost $3,680,000, which would be fully amortized over five years. Production of this product would generate $607,200 additional annual net income for Hearne. Project 3: Purchase a New Fleet of Delivery Trucks Hearne could purchase 25 new delivery trucks at a cost of $145,400 each. The…
3. Analysis of a replacement project At times firms will need to decide if they want to continue to use their current equipment or replace the equipment with newer equipment. The company will need to do replacement analysis to determine which option is the best financial decision for the company. Price Co. is considering replacing an existing piece of equipment. The project involves the following: • The new equipment will have a cost of $1,800,000, and it will be depreciated on a straight-line basis over a period of six years (years 1–6). • The old machine is also being depreciated on a straight-line basis. It has a book value of $200,000 (at year 0) and four more years of depreciation left ($50,000 per year). • The new equipment will have a salvage value of $0 at the end of the project's life (year 6). The old machine has a current salvage value (at year 0) of $300,000. • Replacing the old machine will require an investment in net working capital (NOWC) of $50,000…
Give typing answer with explanation and conclusion A company is considering a project that would require purchasing an asset at a cost of $240,000. The project is expected to create cost savings if it is accepted. Assume the present value of salvage value is $12,000, present value of cost savings after-tax is $220,000, and PVCCATS is $60,000. What is the project's net present value?
Novak Skateboards is considering building a new plant. Bob Skerritt, the company's marketing manager, is an enthusiastic supporter of the new plant. Lucy Liu, the company's chief financial officer, is not so sure that the plant is a good idea. Currently, the company purchases its skateboards from foreign manufacturers. The following figures were estimated regarding the construction of a new plant. Cost of plant Annual cash inflows Annual cash outflows $3,920,000 3,920,000 3,469,000 Estimated useful life Salvage value Discount rate 15 years $1,960,000 11% Bob Skerritt believes that these figures understate the true potential value of the plant. He suggests that by manufacturing its own skateboards the company will benefit from a "buy American" patriotism that he believes is common among skateboarders. He also notes that the firm has had numerous quality problems with the skateboards manufactured by its suppliers. He suggests that the inconsistent quality has resulted in lost sales,…
What issue can occur in your model if the useful life of the new fixed assets is less than the remaining years in the forecast period?\\n\\nA. You can under depreciate the fixed assets\\n\\nB. You can over depreciate the fixed assets\\n\\nC. You will no longer be able to use a waterfall structure for your depreciation schedule
Net Present Value of Project A is OMR 35,000 and Net Present Value of Project B is OMR 45,000. In this case, which of the following statement is correct? O a. Project B will be rejected as its Net Present Value is higher than that of Project A O b. Project A will be accepted as its Net Present Value is lower than that of Project B O c. None of these O d. Project B will be accepted as its Net Present Value is higher than that of Project A

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