Consider the investment project with the following net cash flows Year Net Cash Flow -$1,500 SX S650 SX What would be the estimate value of X if the project IRR is 10 % 1123
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- Relevant details of an investment decision are given below. Initial Investment 10 lacs, Cost of capital 9%, Tax rate 20% From the above Calculate the Payback period, and NPVIf ε = 11% per year, what is the ERR for the cash flows of this project? Let MARR = 11% per year. 1 2 ΕΟΥ Cash Flow ($) 0 110 80 50 The ERR for the cash flows of this project is %. (Round to two decimal places.) 3 20 4 - 1,820 5 600 ***** 6 480 7 370 8 330 9 190 10 120Quèstion 12 A company has an export transaction with the payment term D/P T/R at 15 days after sight. Assuming the documents mailing period is 7 days, and the date of collection is July 1st (without considering the reasonable working hours of the bank). The date of payment is O July 1st July 8th O July 15th O July 22nd
- If ɛ = 11% per year, what is the ERR for the cash flows of this project? Let MARR = 11% per year. EOY 1 3 4 5 6 7 8 10 Cash Flow ($) 110 80 50 20 - 1,820 600 480 370 330 190 120 ..... The ERR for the cash flows of this project is %. (Round to two decimal places.)If one account receives a benefit in the form of cash, goods or services etc, there must be equal loss of benefit by another account. This refers to? a. bookkeeping b. single entry system c. accounting d. double entry system A corporate jet costs $1,350,000 and will incur $200,000 per year in maintenance costs. The jet can be sold for $650,000 after 5 years. What is the capital recovery? MARR = 15% a. $506,310 b. $306,310 c. $270,000 d. $650,000Compute the Pl statistic for Project Z if the appropriate cost of capital is 7 percent. Project Z Time: Cash flow: 0 1 2 3 4 5 -$ 1,400 $ 430 $ 560 $ 730 $ 380 $ 180 Should the project be accepted or rejected? Note: Do not round intermediate calculations and round your final answer to 2 decimal places. PI Should the project be accepted or rejected?
- Profitability Index A project has an initial cost of $40,000, expected net cash inflows of $12,000 per year for 7 years, and a cost of capital of 9%. What is the project's PI? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to two decimal places.Question 10: Consider the following cash flow profile and assume MARR is 12%/year. End of Year 1 2 3 Cash Flow -1000 3400 -5700 3800 a. What does Descartes' rule of signs tell us about the IRR (s) of this project? b. What does the Norstrom's criterion tell us about the IRR (s) of this project? c. Determine the ERR for this project. Is this project economically attractive?Calculate the rate of return on the investment on the following cash flow. If MARR is 10%, should the investment option be accepted (Answer: 13.23% & Yes) I $125 $10 $20 $30 $40 43-424. UTY OF $50 $60
- Consider the following two mutually exclusive projects being considered by an agency. The agency's MARR is 5% per year and the projects have a service life of 5 years. Initial cost Annual revenues Present Worth (PW) Answer the following questions. Project 1 $14,200 $3,832 O A. No B. Yes $2,391 Project 2 $21,700 $5,608 $2,580 a. Based on the PW, the project that is more economical is Project b. Calculate the IRR of each alternative (use the trial-and-error method) % (Round to the nearest one decimal place) The IRR of Project 1 is The IRR of Project 2 is % (Round to the nearest one decimal place) (Enter the project number). c. Perform the incremental IRR analysis to determine the project that is more economical: Incremental IRR =% (Round to the nearest one decimal place); Therefore, based on the incremental IRR, Project is more economical. d. Do the two methods produce the same recomendation for the most economical project?Song's Inc. is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that if a project's projected NPV is negative, it should be rejected. WACC: 10.25% Year 0 1 2 3 4 5 Cash flows ($1,000) $200 $300 $400 $300 $500You are considering an open-pit mining operation. The cash flow pattern issomewhat unusual since you must invest in some mining equipment, conductoperations for two years, and then restore the sites to their original condition.You estimate the net cash flows to be as follows: N Cash flow 0 -$1,600,0001 1,500,0002 1,500,0003 -700,000 What is the approximate rate of return of this investment?(a) 25%(b)38%(c) 42%(d)62%