pls answer the following question. thanks Kingbird Enterprises is using a discounted cash flow model. Identify which model Kingbird might use to estimate the discounted fairvalue under each scenario, and calculate the fair value using the present value tables:Scenario 1: Cash flows are fairly certain$160/year for 5 yearsRisk-adjusted discount rate is 6%Risk-free discount rate is 3%(For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answers to 2 decimal places, e.g. 5,275.25.)Scenario 1:Click here to view the factor table PRESENT VALUE OF 1.Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1.Kingbird might useFair valueScenario 2:Kingbird might useFair value$Scenario 2: Cash flows are uncertain75% probability that cash flows will be $160 in 5 years25% probability that cash flows will be $95 in 5 yearsRisk-adjusted discount rate is 6%LARisk-free discount rate is 3%$✓ model.model.

There are two approaches of estimating the fair value Traditional Approach Expected cash flow…

Answered: Kingbird Enterprises is using a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Windsor Enterprises is using a discounted cash flow model. Identify which model Windsor might use to estimate the discounted fair value under each scenario, and calculate the fair value using the present value tables: Scenario 1: Cash flows are fairly certain $260/year for 5 years Risk-adjusted discount rate is 6% Risk-free discount rate is 2% Scenario 1: (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answers to 2 decimal places, e.g. 5,275.25.) Windsor might use Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Fair value Scenario 2: Windsor might use Fair value $ Scenario 2: Cash flows are uncertain $ 75% probability that cash flows will be $260 in 5 years 25% probability that cash flows will be $115 in 5 years Risk-adjusted discount rate is 6% 11 eTextbook and Media Risk-free discount rate is 2% Save for Later Last saved 1 second ago. model. model.…
Windsor Enterprises is using a discounted cash flow model. Identify which model Windsor might use to estimate the discounted fair value under each scenario, and calculate the fair value using the present value tables: Scenario 1: Cash flows are fairly certain $260/year for 5 years Risk-adjusted discount rate is 6% Risk-free discount rate is 2% (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answers to 2 decimal places, e.g. 5,275.25.) Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Scenario 1: Windsor might use Fair value Scenario 2: Windsor might use Fair value $ tA $ Scenario 2: Cash flows are uncertain 75% probability that cash flows will be $260 in 5 years 25% probability that cash flows will be $115 in 5 years Risk-adjusted discount rate is 6% Risk-free discount rate is 2% traditional approach 1,225.50 expected cash flow 1,095.21 model. model.
What is the profitability index for the following set of cash flows if the relevant discount rate is 10 percent? What if the discount rate is 15 percent? If it is 22 percent? Year 0 Year 1 Year 2 Year 3 Discount rate Discount rate Discount rate $ $ DELLI $ $ (15,300) 9,400 7,600 4,300 10% 15% 22% Complete the following analysis. Do not hard code values in your calculations. You must use the built-in Excel function to answer this question. Profitability index at 10 percent
Net Present Value Method, Present Value Index, and Analysis for a service company Continental Railroad Company is evaluating three capital investment proposals by using the net present value method. Relevant data related to the proposals are summarized as follows: Ramp Computer Facilities Network $423,052 Amount to be invested Annual net cash flows: Year 1 Year 2 Year 3 Year 1 2 3 4 5 6 7 8 9 10 6% Present Value of $1 at Compound Interest 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 10% 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 Maintenance Equipment $677,579 0.424 0.386 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 305,000 284,000 259,000 0.361 0.322 15% 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.327 0.284 0.247 220,000 198,000 176,000 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 $188,789 125,000 86,000 63,000
Consider the following cash flows: Year Cash Flow 0 -$ 28,900 1 14,800 2 3 14,100 10,500 a. What is the profitability index for the cash flows if the relevant discount rate is 8 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161 b. What is the profitability index if the discount rate is 13 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161 c. What is the profitability index if the discount rate is 20 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161 Answer is not complete. 0.181 × a. Profitability index b. Profitability index c. Profitability index
Consider the following cash flows: Year Cash Flow 0 -$ 14,800 1 8,400 2 7,600 4,300 a. What is the profitability index for the above set of cash flows if the relevant discount rate is 10 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. b. What is the profitability index if the discount rate is 15 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. c. What is the profitability index if the discount rate is 22 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. a. Profitability index b. Profitability index c. Profitability index
Find the profitability index for Oman Air conditioner Company if the initial investment is 4000 OMR and the cash Inflows are as follows: Year 1 =1350 OMR; Year 2 =1400 OMR; Year 3=1450 OMR and Year 4=1500 OMR. Use discount rate as 5%. Select one: a. 1.69 b. 1.48 c. 1.26 d. 1.83 e. None of the options Find the Net Present Value (NPV) for Oman Computer company if the initial investment is 5000 OMR and the cash Inflows are as follows: Year 1 =1250 OMR; Year 2 =1500 OMR; Year 3=1750 OMR and Year 4=2000 OMR. Use discount rate as 3%. Select one: a. 1005.94 OMR b. 1574.27 OMR c. 2344.92 OMR d. None of the options e. 2070.76 OMR
n.com Connect (i) Consider the following cash flows: Year Cash Flow 0 -$29,600 1 14,100 2 14,800 3 11,200 a. What is the profitability index for the cash flows if the relevant discount rate is 11 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161 b. What is the profitability index if the discount rate is 16 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. c. What is the profitability index if the discount rate is 23 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. a. Profitability index b. Profitability index c. Profitability index.
Find the profitability index for Oman Air conditioner Company if the initial investment is 4000 OMR and the cash Inflows are as follows: Year 1 =1350 OMR; Year 2 =1400 OMR; Year 3=1450 OMR and Year 4=1500 OMR. Use discount rate as 5%. Select one: O a. 1.48 O b. None of the options O c. 1.69 O d. 1.83 Oe. 1.26
3. follows: Carnegie Corp. projects an annual cash flow for one of its divisions as Year 0 1 2 3 4 5 6 Cash flow (SM) 3 0 -10 2 2 2 2 What is the IRR for this cash flow stream? Try plotting the NPV as a function of the discount rate. Are there any problems with using IRR for this application?
Mendez Company has identified an investment project with the following cash flows. Year Cash Flow 1 $ 1,150 2 1,030 3 1,520 4 1,880 If the discount rate is 11 percent, what is the present value of these cash flows? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. What is the present value at 16 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. What is the present value at 22 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
What is the present value of the following stream of cash flows if the discount rate is 9%? Year 1-5: $14,000 inflow Years 6-20: $23,000 inflow (Use the present value tables in your course packet for any present value calculations. Round your final answer to the nearest dollar.)

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