Please answer part cPayback Period, IRR, and Minimum Cash FlowsThe management of Mesquite Limited is currently evaluating the following investment proposal:Time 0 Year 1 Year 2 Year 3 Year 4Initial investment $250,000Net operatingcash inflows$100,000 $100,000 $100,000 $100,000G(a) Determine the proposal's payback period.2.5years(*(b) Determine the proposal's internal rate of return. (Refer to Appendix 24B if you use the table approach.)22(c) Given the amount of the initial investment, determine the minimum annual net cash inflows required to obtain an internal rate of return of 8percent. Round the answer to the nearest dollar.$ 89,344 *

Internal rate of return refers to the rate of return that is being by the investor over the amount…

Payback Period, IRR, and Minimum Cash Flows The management of Mesquite Limited is currently evaluating the following investment proposal: Time 0 Year 1 Year 2 Year 3 Year 4 Initial investment $250,000 Net operating cash inflows $100,000 $100,000 $100,000 $100,000 (a) Determine the proposal's payback period. 2.5 ✔years

Payback Period, IRR, and Minimum Cash Flows The management of Mesquite Limited is currently evaluating the following investment proposal: Time 0 Year 1 Year 2 Year 3 Year 4 Initial investment $250,000 Net operating cash inflows $100,000 $100,000 $100,000 $100,000 (a) Determine the proposal's payback period. 2.5 ✔years

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 7PA: There are two projects under consideration by the Rainbow factory. Each of the projects will require...

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There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,000 and is expected to generate the following cash flows: Use the information from the previous exercise to calculate the internal rate of return on both projects and make a recommendation on which one to accept. For further instructions on internal rate of return in Excel, see Appendix C.
Please create two 5-year project cash flows with 68,500 TL and 98,600 TL initial investment amounts by filling the missing parts of the table below. Project A Project B Initial Investments Years 68500 TL 98.600 TL Cash Flows 1 37.000 5.000 2 10.000 8.600 3 12.000 10.000 4 5.500 11.000 4.000 64.000 a. According to the payback method which project would you prefer? Why? (19 pts) b. Please list three weak points of the payback method and briefly describe them. (5 pts)
There are two proposals of investment, the estimated financial data related to these proposal as following Proposal A Proposal B Initial Investment $350000 $180000 Cash Inflow: year 1 $100000 $50000 Year 2 $120000 $50000 Year 3 $150000 $50000 Year 4 $90000 $50000 Year 5 $30000 $50000 Required Rate on return (RRR) 10% 10% All payment of inflows is at the end of accounting period while investment is paid at beginning of period, straight line method of depreciation is used Answer Below Questions Profitability index of Proposal B Answer 1 Payback period in years and months of Proposal B Answer 2 Rank the proposals based on Lowest Payback Period Answer 3 Profitability index of Proposal A Answer 4 Simple Rate on Return of Proposal A Answer 5 Payback period in years and months of proposal A Answer 6 Internal Rate on Return of Proposal B (IRR) Answer 7 PV…
Payback Period, IRR, and Minimum Cash Flows The management of Mesquite Limited is currently evaluating the following investment proposal: Year 4 Initial investment $260,000 Net operating cash inflows Time 0 Year 1 Year 2 Year 3 -- $100,000 $100,000 $100,000 $100,000 (a) Determine the proposal's payback period. 2.6 years % (b) Determine the proposal's internal rate of return. (Refer to Appendix 24B if you use the table approach.) (c) Given the amount of the initial investment, determine the minimum annual net cash inflows required to obtain an internal rate of return of 16 percent. Round the answer to the nearest dollar. $
Please give exact answer and excel steps Jeans LLC has a project with the following cash flows . Its required rate of return is 5 % , Year 012345 Cash Flow Project A -52,000.00 25,000.00 17,000.00 14,000.00 12,000.00 -3,000.00 What is the internal rate of retum ( IRR ) for this project ? options: a. 11.73859230479%b. 11.73962884992%c. 11.738592037872%d. 11.738591574995%e. 11.738592402818%f. 11.738672984783% Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Information on four investment proposals is given below: Investment Proposal A В Investment required Present value of cash inflows $ (360,000) $(50,000) $(140,000) $ (840,000) 214, 300 $ 146,900 $ 17,600 $ 74,300 $ 281,400 7 years 506,900 67,600 1,121,400 Net present value Life of the project 5 years 6 years б уears 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.
Assume projects A and B are mutually exclusive. The respective cash flows for projects A and B are stated below: Project Year 0 Year 1 Year 2 Year 3 A $575,000 $373,000 $219,000 $185,000 $980,000 $395,000 $477,000 $339,000 If the discount rate, based on an investment of similar risk, is 10%, which of the projects should be accepted based on: (a) Payback period rule (b) NPV rule (c) IRR rule (d) Profitability Index criteria (10) (25) (15) (25) Note: Show your answers in tables and all calculations properly presented.
Annual cash inflows that will arise from two competing investment projects are given below: Investment A $ 3,000 4,000 5,000 6,000 $ 18,000 Year 1 2 3 4 The discount rate is 10% Click here to view Exhibit 148 1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables Required: Compute the present value of the cash inflows for each investment Year 1234 S S Investment B $6,000 5,000 4,000 3,000 $18,000 Present Value of Cash Flows Investment A 300 300 $ Investment B
Kumi Ltd is considering an investment in a project, which requires an immediate payment of GHS15,000, followed by a further investment of GHS5,400 at the end of the first year. The subsequent return phase net cash inflows are expected to arise at the end of the following years:Year 1 2 3 4 5 cashflows (GHS) 6,500 7,750 5,750 4,750 3,750You are required to estimate the internal rate of return of this project assuming the company’s cost of capital of 16%.
Assume a $50,000 investment and the following cash flowa for two aleternatives.. Year Investment A Investment B 1 $10,000 $20,000 2 $11,000 $25,000 3 $13,000 $15,000 4 $16,000 5 $30,000 Which alternative would you select under the payback method? 6
Based on the following, obtain the Incremental Cash Flow and determine the NPV (12% discount) for the project: \begin{tabular}{|l|r|r|r|r|r|r|} \hline & \multicolumn{6}{|c|}{ Year } \\ \hline & & 1 & 2 & 3 & 4 & 5 \\ \hline Investment i Show Transcribed Text $403.93 $280.28 $356.63 $179.41
Consider the cash flows for the following investment projects. Assume that MARR=12%/year. A B C 0 - PhP 1,000 – PhP 1,000 - PhP2,000 1 900 600 900 2 500 500 900 100 500 900 4 50 100 900 Which project should be selected using incremental analysis (AW method)? ANSWERS: AWA = PhP Blank 1 AWB = PhP Blank 2 AWC = PhP Blank 3 AW (B-A) = PhP Blank 4 AW (C-B) = PhP Blank 5 Investment Blank 6 (use capital letter) is better.