Calculate the net present value (NPV), the return on investment (ROI) and the payback period usinga discount rate of 8 percent for the following systems development project.AnticipatedAnnual BenefitsExpected AnnualOperating CostsDiscount Factorsat 8 PercentYear1$55,000$5,000.9259$60,000$5,00085733$70,000$5,500.7938$75,000$5,5007349$80,000$7,000.6805$80,000$7,000.63017$80,000$7,000.58338$80,000$8,000.5401The initial development costs for the system were $225,000.

Payback period is the amount of time the firm takes to recover all the cost of the project. It does…

Calculate the net present value (NPV), the return on investment (ROI) and the payback period using a discount rate of 8 percent for the following systems development project. Expected Annual Operating Costs Year Anticipated Annual Benefits Discount Factors at 8 Percent 1 $5,000 $5,000 .9259 $60,000 $5,000 .8573 3 $70,000 $5,500 .7938 $75,000 $5,500 7349 $80,000 $7,000 .6805 $80,000 $7,000 .6301 7 $80,000 $7,000 5833 8 $80,000 $8,000 .5401 The initial development costs for the system were $225,000.

Calculate the net present value (NPV), the return on investment (ROI) and the payback period using a discount rate of 8 percent for the following systems development project. Expected Annual Operating Costs Year Anticipated Annual Benefits Discount Factors at 8 Percent 1 $5,000 $5,000 .9259 $60,000 $5,000 .8573 3 $70,000 $5,500 .7938 $75,000 $5,500 7349 $80,000 $7,000 .6805 $80,000 $7,000 .6301 7 $80,000 $7,000 5833 8 $80,000 $8,000 .5401 The initial development costs for the system were $225,000.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Consider the following information about a project: PROJECT YEAR O YEAR 1 YEAR 2 YEAR 3 YEAR 4 COSTS $160,000 $43,000 $50,000 $50,000 $64,000 BENEFITS $0 $400,000 $400, 000 $500,000 $500,000 a) Calculate the NPV assuming 10% discount rate b) Determine in which year will be the payback c) Calculate (ROI)? Provide the detail answer for your calculation.
Estimate the NPV, ROI, and payback period for the XYZ project using the information below, Estimated costs for the XYZ project are $200,000 in year 0 and $50,000 each in years 1, 2, and 3. Estimated benefits are $0 in year 0 and $150,000 each year in years 1, 2 and 3. Calculate the following i) NPV, ii) ROI, iii) and year in which payback occurs for a discount rate of 6.5%. Discount Rate Paragraph Costs Assume the Project started in year 0 Discount Factor Discounted Costs Benefits Discount Factor Discounted Benefits ROT BIEEE 8 Discounted Benefits-Costs Cumulative Benefits-costs Pay Back Year 6.5% 0 1 2 3 Total
Compute the (a) net present value, (b) internal rate of return (IRR), (c) modified internal rate of return (MIRR), and (d) discounted payback period (DPB) for each of the following projects. The firm’s required rate of return is 13 percent. Year Project AB Project LM Project UV 0 $(90,000) $(100,000) $ (96,500) 1 39,000 0 (55,000) 2 39,000 0 100,000 3 39,000 147,500 100,000 Which project(s) should be purchased if they are independent? Which project(s) should be purchased if they are mutually exclusive?
Compute the pay back, discounted pay back, NPV and IRR of the following projects; Assume a discount rate of 10% C0 C1 C2 C3 Project A -2000 500 500 5000 Project B -2000 500 1800 0 Project C -2000 1800 500 0
Estimate the NPV, ROI, and payback period for the XYZ project using the information below, Estimated costs for the XYZ project are $200,000 in year 0 and $50,000 each in years 1, 2, and 3. Estimated benefits are $0 in year 0 and $150,000 each year in years 1, 2 and 3. Calculate the following i) NPV, ii) ROI, iii) and year in which payback occurs for a discount rate of 6.5
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. Compute annual rate of return, Pay back period b NPV using 14% discounts rate , Is the Project acceptable using this discount rate Compute NPV using 11% discounts rate. Is the Project acceptable using this discount rate
The two projects are as follows. Discount rate = 10%. Project X Project Y Year Cash-Flow Cash-Flow 0 -$100,000 -$100,000 1 50,000 10,000 2 40,000 30,000 3. 30,000 40,000 4 10,000 60,000 Calculate the NPV of project X $6,032.99 $4,239.20 $7,881.98 $4,917.70 Calculate IRR of project X. 19% 49% 79% 59% Calculate the payback period of project X 33 years 33 years 33 years 33 years Calculate the crossover rate. 93% 58% 00% 17%
Q2C) Use Incremental benefit cost analysis method to compare between the following three projects. Use i=9%/yr.: Project Project A Project C Project D Item Annual Benefits to $10,000 $6,000 $8,000 pablic Annual Disbenefits $2000 $3,000 $1,500 to public Capital Investment $20,000 $15,000 $14,000 Annual Operational $1,000 $1,800 $2.000 Cost Useful Life 10 years 12 years 15 years
time value of money practice example: Please show calcualtions/steps (excell or other format): a) Calculate PB, DPB, NPV, IRR and PI for the following project: - discount rate of 12% - initial investment = 750,000 - ncf yr 1 = 150,000 - ncf yr 2 = 300,000 - ncf yr 3 = 400,000 - ncf yr 4 = 250,000 - ncf yr 5 = 100,000
Calculate the payback period, the discounted payback period and the NPV for the following project using a rate of 5%. Time Cash Flow 0 - $63,000 $ 21,000 $ 21,000 $ 21,000 $ 21,000 Payback = Discounted Payback =
4 You are considering the following investment activity. The facts are the following: Required investment 300,000.00 Discount Rate 9% Life of project 7.00 Years Net income for the project Sales 140,000.00 Expenses Material 25,000.00 Labor 35,000.00 Overhead 15,000.00 Total Expenses 75,000.00 Net Income 65,000.00 What is the NPV of this investment? What is the IRR of this investment? Would you fund this project? Show your work below Year 0 1 2 3 4 5 6 7

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