If you invest $10,000 now into a project that will yield net revenues of $1,327 at the end of each year for 12 years, what is the internal rate of return (IRR) of your investment? Oa. 8% Ob. 18%
Q: Lifewear, a manufacturer of women's sports clothes, is considering adding a line of skirts and…
A: The minimum acceptable rate of return is the least return that a financial backer or firm will take.…
Q: An investment of P20,000 will be required at the end of the year. The project would terminate at the…
A: Investment Required Initially after year 1 = 20,000 Salvage Value after year 5 = 26000 So , there…
Q: Charlie has a project for which he had determined a present value of $56,740. He now has to…
A: IRR stands Internal Rate of Return is technique of capital budgeting which used in financial…
Q: If the appropriate discount rate for this project is 14%, then the net present value (NPV) is…
A: Given interest rate = 14% Present value of each cash flow = cashflow /(1 + rate)^time For year 0 =…
Q: An advertising campaign will cost $200,000 for planning and $30,000 in each of the next six years.…
A: Year Cash Flow 0 -2,00,000 1 20,000 + 40,000 - 40,000 2 15,000+ 40,000 - 40,000 3 10,000+…
Q: Use i-9% to find the total EUAC of Plan A which has a total investment of $200,000. Out of this,…
A: Interest Rate = 9% total invstment = 200,000 (Land = 1,20,000, & Building = 80,000) Building…
Q: Suppose you are in charge of the procurement for installation of a heating system for a factory…
A: Answer:-
Q: 9. Electric posts and transmission lines must be installed in a new industrial park. It has been…
A: Length of transmission line = 23 km or 23000 meters The cost of each kilometre line = P14000 Pole…
Q: firm decides to invest X units of capital in Project A and Yunits of labour in Project B. iv.…
A:
Q: 10 An advertising campaign will cost $500,000 for planning and $50,000 in each of the next five…
A: Initial cost = $500,000 $50,000 in each of the next five years Increase in revenues = $50,000 per…
Q: A businessman purchases a common stock worth P1,000 every year for a period of 10 years. At the…
A: A businessman purchases a common stock worth P1,000 every year for a period of 10 years. At the of…
Q: Suppose that a new machine tool having a useful life of only one year costs $80,000. Suppose, also,…
A: Given, The cost of purchasing the machine : $80,000 Increase in revenue due to the machine :…
Q: Suppose we have four mutually exclusive projects, D1, D2, D3, and D4, whose internal rates of return…
A: Comparing project D1 with project D2: The IRR from project D1 compared with project D2 is given to…
Q: Suppose you are in charge of the procurement for installation of a heating system for a factory…
A: Answer:
Q: A company is considering switching from a cash only policy to a net 30 credit policy. The price per…
A: NPV :NPV means Net Present ValueIt is the difference between Cash Inflows and Cash Outflows in…
Q: 34. Skyscrapers Corporation is engaged in the manufacturing of standard wide flange section of steel…
A: Solution- The sky crapper corporation is engaged in the manufacturing of standard wide flange…
Q: Annual maintenance costs for a machine are P1,500 this year and are estimated to increase 10% each…
A: We can calculate the present worth for the next 6 year using the different interest rates if annual…
Q: You have just won the lottery. The state offers you an amortized payout of $200,000 at the end of…
A: A lump sum is defined as a single large sum of money. In contrast to a series of payments made over…
Q: A multinational engineering consulting firm that wants to provide resort accommodations to special…
A: Investment is the purchase of goods and services over a period of time. It means as the investment…
Q: A civil engineer presently receives a monthly salary of P80,000.00. His invested savings earn 14%.…
A: Investment: It refers to the process under which the economy gets the increase in money supply. The…
Q: An investment of P100,000 is expected to yield a regular annual net income of P25,000 per year for…
A: Given that: Benefit = 25000Investment, or P = 100000n = 10i = 10%
Q: An integrated, combined cycle power plant produces 285MW of electricity by gasifying coal. The…
A:
Q: Fixed costs are irrelevant in decisions about whether a product should be retained or be dropped.…
A: 22. The required rate of return is the maximum rate of return that an investment project yield be…
Q: What is the capitalized worth of a project that has an indefinitely long study period and dollar…
A: According to the Cash Flow Diagram, these cash flows repeat after every 5 years, for an indefinite…
Q: Consider the two investments with the following sequences of cash flows Compute for i* for each…
A: Consider the two investments with the following sequences of cash flows Compute for i* for each…
Q: Sam invested a total of $100,000 into a project, and his total profits to date sum up to $120,000.…
A: Given information: Investment amount = $100000 Total profit = $120000
Q: If a company must choose between two projects, it should proceed with the one that generates a…
A: In capital budgeting, IRR is a tool that is used to measure the profitability of an investment.…
Q: nvestment projects may be appraised by calculating either Net Present Value (NPV) or Internal Rate…
A: Answer - Net Present Value (NPV) :- It is method to helps calculate the present value of…
Q: Consider two investments A and B with the sequences of cash flows given in the table below. A) If…
A: The usual net gain or loss of an investment over a certain time period represented as a percentage…
Q: You have a project with the net cash flow summarized below. The project is not suitable for direct…
A: The reinvestment rate is the return a financial backer hopes to make subsequent to reinvesting the…
Q: You are buying a house which cost $150,000. This house will have an estimated life of 10 years with…
A: Investment returns are measured by the real after-tax rate of return, which takes inflation and…
Q: A project has a service of five years with the initial investment outlay of$180,000. If the…
A:
Q: Your friend made an investment of P 45,000.00 for 60 days at 15% simple interest. If withholding tax…
A: In the above question, it is given that : Initial Amount = P 45,000 Time period = 60 days Interest…
Q: An oil refinery is willing to install a 60,000-lb/hour pump for $325,000 in 2020 when the pump index…
A: The give costing of the oil refinery in 2020 is $325000 and its index value in the same year is 500.…
Q: dropped. True False 22 The required rate of return is the maximum rate of return that an investment…
A: 21 - TRUE Since Fixed costs must be paid irrespective of the Price, quantity Or profitability of…
Q: If depreciation rate = .1*(capacity utilization rate)^2 and R/P = .05 What is the equation for the…
A: The real rate of return on capital is calculated on the basis of the capacity utilization rate. It…
Q: The sole proprietor of the FM2 Financial Services, Bondo, receives all accounting profits earned by…
A: The Accounting profits of the firm are calculated as Total Revenues - Total Expenses. But if we…
Q: The internal rate of return (IRR) is the interest rate that sets the net present value (NPV) of the…
A: Internal rate of return is a method of calculating an investment rate of return.
Q: The internal rate of return (IRR) is the interest rate that sets the net present value (NPV) of the…
A: IRR helps in the analysis of various different investment decisions that the company has to make.
Q: Q2. Consider the cash flow given in the following table. What is the value of the missing cash…
A: Cash flow is the movement of money in and out of a company. Cash received signifies inflows, and…
Q: Suppose you are Charge of procurement sheating system för factory building. Option A is quoted as an…
A: According to the question, Option B costs $17.000 more than Option A Initially. To check whateverthe…
Q: What do you know about the mathematical value of the internal rate of return of a project under each…
A: Internal rate of return refers to the investments in the economy that are backed by potential…
Q: You are the Chief Financial Officer (CFO) for a Toronto-based Biotech company. Your company has…
A: Interest refers to the amount paid in excess of the principal amount by the borrower to the lender.…
Q: Suntech Sdn Bhd is a company which involved in manufacturing two types of product W and Y. The…
A: One of the key goals of firms in a market is to maximize it's profits. Profit is the difference…
Q: Which of the following values comes closest to the net present value of a project that requires an…
A: Net present value is the net cashflow which is calculated by the reduction of the cash inflow from…
Q: razy Racoon is now considering another bond issue that would settle on June 30, 2020 and mature 30…
A: Face Value = $1000 Price of Bond = $770 Annual Coupon Rate = 3% = 0.03 No. of coupons per year = 2…
Q: An investment of P 8.5 million is expected to yield an annual gross income of P 2.85 million. Annual…
A: A rate of return (RoR) is the net gain or loss of an investment over a specified time period,…
Step by step
Solved in 2 steps with 1 images
- You may purchase 100 shares of Mun Tee ltd on a 55 percent margin when the shares are selling at K20 each. The Lusaka stock exchange broke charges you 10 percent annual interest,and commission are 3 percent of total stock value on both the purchase and the sale. If a year later you receive a K0.50 per share dividend and sell the stock for K27. What's your rate of return on investment?Matollows and 250 shillings in the following year. After that, dividends are expected to grow at constant 5% per year. If the required rate of return is 10%, what price should investors pay for such shares today? 4. Suppose a firm is considering a project that would require an initial cash outlay of 15 million shillings and expected to generate shs 4.5 million each year for the next 4 years. The firm assumes that the prices and costs increases at the same rate and that the required rate of return expressed in nominal terms is 14%. The firm also practices a policy whereby cash flows are stated at the prices of period zero. The inflation rate is expected to be 5%. (a)Outline two ways in which the effects that inflation has on the acceptability of investment projects could be considered. (b)Using the NPV technique, is the project worth taking? What have you learned from your analysis as far as treating inflation in investment analysis is concerned? 30/2021 4:39:41 PM Page 1 of 2A labor saving device system save $2,000 per year for five (5) years. It can be installed at a cost of $8,000. The rate of return on this planned investment is most nearly: a.9.36% b.10% c.10.36% d.12.36%
- Given problem: What is the annual rate of interest if 228.92 is earned in 7 months on an investment of 17,266.77? >Use 4 decimal placesSuppose that you invest $3,000 in stock. Fiveyears later, your investment yields $8,568. What isthe rate of return of your investment?To calculate the uniform periodic cashflows, A, that correspond to the initial investment, P, you would use the following expression: (Note that the A's go from periods 12 to 35). A 0 1 2 12 13 14 OA. P(F/P. I, 11)(A/P, 1, 24) O B. P(F/P, I, 12)(A/P, 1, 23) OC. P(P/F, I, 11)(A/F, I, 24) OD. P(A/P, I, 35) OE. P(P/F, I, 12)(A/F, I, 23) 35
- (7.2) The NPV of an asset equals the difference between the PV of the future produced by an asset and the present value turned out to be exactly zero, we would be investment and not taking it. of the asset. In the unlikely event that the net between taking the (7.3) The IRR is the rate of return which equates the NPV of an investment to An investment is bies if the IRR exceeds the required return that could be earned in the financial markets on investment of equal risk; the IRR on an investment is the required return that results in a zero when it is used as the (7.4) A is the impact that a given capital budgeting project might have on cash flows in another area of the firm. One of the examples of this is cash flows of a new project that come at the expense of a firm's existing projects. which is the (7.5) In the bottom-up approach, OCF = crucial to remember that this definition of OCF as only if there is no It is is correct plus subtracted in the calculation of net income. (7.6) The…You have an opportunity to invest $49,300 now in return for 500,500 in one year. If your cost of capital is 7 8%, what is the NPV of this investment? The NPV will be $(Round to the nearest cent) CODEDCompute the (i) net present value and (ii) internal rate of return of the following Q2. capital budgeting projects. The firm's required rate of return is 15 percent. Based on the NPV which project should be ассеpted. [8] Projects Year X Y 50,000 45,000 1 10,000 12,000 2 30,000 10,000 3 25,000 14,000
- Your firm has discovered a cheap and efficient technology of turning used plastic bottles and bags into various products. You limit your attention to the following two production options: you can produce plastic utensils or helmets. In the "utensils" case your estimat ann revenue $25,000, while production will cost you $8,000. However, in your "helmets" option, you expect to sell 2000 helmets every year at $10 each and the average total cost of every helmet will be $3. What is your accounting ?profit if you decided to produce helmetsA labor saving device system save $2,000 per year for five (5) years. It can be installed at a cost of $8,000. The rate of return on this planned investment is most nearly: a. = 12.36% b. = 9.36% c. 10% d. i = 8%The internal rate of return (IRR) is the interest rate that sets the net present value (NPV) of the cash flows equal to zero Select one: O True O False