Information on four investment proposals is given below:Investment requiredPresent value of cash inflowsNet present valueLife of the projectRequired:1. Compute the project profitability index for each investment proposal. (Round your answers to 2 dec2. Rank the proposals in terms of preference.Propoza!ABCDCOLONINSTIndex$(60,000) $(130,000) $(140,000) $(2,100,000)86,600 181,100 213,900 2,803, 200703,200$ 26,600 $ 51,100 $ 73,900 $5 years7 years6 years6 yearsKanaPreferenceQ Searchk< PrevD4 of 7SUSNTHE

Profitability index refers to the method of capital budgeting used for measuring the attractiveness…

Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project $(60,000) $(130,000) $(140,000) $(2,100,000) 86,600 181,100 213,900 2,803,200 703,200 6 years $ 26,600 $ 51,100 $ 73,900 $ 5 years 7 years 6 years Required: 1. Compute the project profitability index for each investment proposal. (Round your answers to 2. Rank the proposals in terms of preference.

Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project $(60,000) $(130,000) $(140,000) $(2,100,000) 86,600 181,100 213,900 2,803,200 703,200 6 years $ 26,600 $ 51,100 $ 73,900 $ 5 years 7 years 6 years Required: 1. Compute the project profitability index for each investment proposal. (Round your answers to 2. Rank the proposals in terms of preference.

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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Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project 4 Required: 1. Compute the project profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. Investment Proposal A BUD C Project Profitability Index Investment Proposal A D $(106,000) $(116,000) $(86,000) $(144,000) 142,040 178,640 118,680 213,120 $36,048 $ 62,640 $ 32,680 $ 69,120 5 years 7 years years 6 years Rank Preference:
Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project Required: 1. Compute the profitability index for each investment proposal. Note: Round your answers to 2 decimal places. 2. Rank the proposals in terms of preference. Investment Profitability Proposal Index A B с D $ (150,000) 211,500 $ 61,500 Rank Preference 5 years Investment Proposal 6 $ (200,000) 275,600 $ 75,600 7 years $ (180,000) 274,100 $ 94,100 6 years D $ (2,600,000) 3,470,500 $ 870,500 6 years
Information on four investment proposals is given below: Investment required. Present value of cash inflows Net present value Life of the project Answer is complete but not entirely correct. Profitability Index Investment Proposal ABCO A В Required: 1. Compute the profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. с D 3 0.41 0.38 0.50 0.33 Rank Preference A $ (240,000) 337,300 $ 97,300 Second Third First Fourth ✓ ✔ 5 years Investment Proposal $ (73,500) 110,250 $36,750 B $ (105,000) 144,900 $ 39,900 7 years 6 years $ (126,000). 168,000 $ 42,000 6 years
Information on four investment proposals is given below: Investment required. Present value of cash inflows Net present value Life of the project Investment Proposal Required: 1. Compute the profitability index for each investment proposal. Note: Round your answers to 2 decimal places. 2. Rank the proposals in terms of preference. A B C D Profitability Index A $ (150,000) 211,500 $ 61,500 Rank Preference 5 years Investment Proposal B $ (200,000) 275,600 $ 75,600 7 years с $ (180,000) 274,100 $ 94,100 6 years D $ (2,600,000) 3,470,500 $ 870,500 6 years
Profitability index. Given the discount rate and the future cash flow of each project listed in the following table, . use the Pl to determine which projects the company should accept. What is the Pl of project A? i Data Table (Round to two decimal places.) (Click on the following icon o in order to copy its contents into a spreadsheet.) Cash Flow Project A -%241,900,000 $150,000 $350,000 Project B Year 0 $2,300,000 $1,150,000 $950 000 $750,000 $550,000 Year 1 Year 2 Year 3 $550,000 Year 4 $750,000 $950,000 4% Year 5 $350.000 Discount rate 18% Print Done
Information on four investment proposals is given below: Investment required. Present value of cash inflows Net present value. Life of the project Investment Profitability. Index Proposal A 8 C D A $ (790,000) 1,121,300 $ 331,300 Rank Preference 5 years Required: 1. Compute the profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. Investment Proposal $ (120,000) 182,000 $ 62,000 B $ (120,000) 168,300 $ 48,300 7 years 6 years D $ (1,820,000) 2,427,200 $ 607,200 6 years
Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project Investment Profitability Index Proposal A B с D A $ (60,000) 88,000 $ 28,000 5 years Required: 1. Compute the profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. Rank Preference Investment Proposal с $ (40,000) 64,200 $ 24, 200 B $ (70,000) 97,300 $ 27,300 7 years 6 years D $ (990,000) 1,318,700 $ 328,700 6
Calculate the NPV of each project. (Use the NPV function in Excel to solve this problem.) Which of the two projects would you fund if the decision is based only on financial information and you could only choose one of the projects? Omega Alpha Year Inflow YO 0 Y1 0 Outflow 207,000 110,000 Netflow Year Inflow Outflow Netflow (207,000) YO 0 217,000 (217,000) (110,000) Y1 7,000 190,000 (183,000) Y2 150,000 0 150,000 Y2 150,000 0 150,000 Y3 220,000 30,000 190,000 Y3 220,000 30,000 190,000 Y4 161,000 0 161,000 Y4 191,000 0 191,000 Y5 205,000 48,000 157,000 Y5 205,000 38,000 167,000 Y6 197,000 0 197,000 Y6 197,000 0 197,000 Y7 100,000 30,000 70,000 Y7 100,000 30,000 70,000 Total 1,033,000 425,000 608,000 Total 1,070,000 505,000 565,000 The NPV for Omega is The NPV for Alpha is The better project is
A project has cash flows of -$35,000, $0, $10,000, and $42,000 for Years 0 to 3, respectively. The required rate of return is percent, you should the project. 15 percent. Based on the internal rate of return of O 24.76; accept O 13.96; accept O 14.92; reject O 15.21; accept A Click Submit to complete this assessment. Question 30 of 30 Save and Submit
Based on the cash flows given below, calculate the PI of a project that has a required rate of return of 12 percent. Also, indicate whether the project should be accepted. (Round answer to 2 decimal places, e.g. 25.25.) Year 0: -$94,000 Year 1: $19,000 Year 2: $36,000 Year 3: -$16,000 Year 4: $103,000 PI Type your answer here Accept project Choose your answer here
Calculate the profitability index for the below projects and indicate your order of choices. Project Present Value Investment A $145,000 $95,000 $135,000 $80,000 $175,000 $110,000 Select one: a. B, A and C b. A, C and B c. B, C and A d. C, B and A B с
Determine the future value of the following single amounts. Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) 1. 2. 3. 4. Invested Amount 15,500 23,000 35,000 56,000 $ 67 67 $ $ $ i = 5% 5% 11% 6% n = 12 6 18 14 Future Value

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