Question 18 Hamilton Company invested in a two-year project having an internal rate of return of 12%. The project is expected to produce cash flow from operations, net of income taxes, of P60,000 in the first year and P70,000 in the second year. The present value of 1 at 12% for year one is 0.893 and for year two is 0.797. How much will be the investment for the project ? P109,370 P103,610 P116,090 P122,510
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- QUESTION 1 XYZ is evaluating a project that would require an initial investment of $72,300.00 today. The project is expected to produce annual cash flows of $8,400.00 each year forever with the first annual cash flow expected in 1 year. The NPV of the project is $7,500.00. What is the IRR of the project? O 11.62% (plus or minus 0.02 percentage points) 10.53% (plus or minus 0.02 percentage points) 10.37% (plus or minus 0.02 percentage points) 12.96% (plus or minus 0.02 percentage points) O None of the above is within 0.02 percentage points of the correct answerQUESTION 5 GoGo Inc. is considering a new project that requires an initial investment of $36140 and will generate a net income of $5518 per year, if the project's profitability index is 2.8, the present value of the project's future cash flows is $ Round to the nearest dollar.QUESTION 5 Garfield Inc is considering a new project that requires an initial investment of $39500 and will generate a net income of $5242 per year, if the project's profitability index is 1.3, the present value of the project's future cash flows is $ Round to the nearest dollar.
- QUESTION 12 Consider a project that costs $219,000 today and is expected to earn $382,000 after 6 years. There are no other cash flows. Cost of capital is 9.4%. What is thi project's internal rate of return? O a. 11.0% Ob. 6.9% O c. 9.7% O d. 13.4% O e. 15.7%Question 1 Next Gen Corporation is considering two investment opportunities. The company can choose either to invest in Project K or Project M. The expected annual free cash flows for each project as follows: Year 0 1 2 3 4 5 Cash flows (RM) Project K Project M (7,000) (7,000) 1,800 (2,500) 1,800 4,800 0 0 0 0 3,800 10 000 If the required rate of return is 8%, calculate: 1. calculate the payback period for each project. 2. calculate the net present value for each project. 3. based on the two investment techniques, which project should be accepted?Question 3 Fisca Ltd Is Considering Two Independent Projects, Project A And Project B. The Initial Cash Outlay Associated With Project A Is P50,000 And The Initial Cash Outlay Associated With Project B Is P70,000. The Required Rate Of Return On Both Projects Is 12%. The Expected Annual Free Cash Flows From Each Project Are As Follows: YEAR PROJECT A PROJECT B 0 -50,000 -70,000 1 12000 13,000 2 12000 13000 3 12000 13000 4 12000 13000 5 12000 13000 6 12,000 13000 Required: a.For both projects, calculate The net present value. The internal rate of return. The profitability index. Assuming there is capital rationing, advice Fisca ltd which project should be accepted over the other. Explain the limitations of using a profitability index in a situation where there is capital rationing.
- Question 19 Pinks Co. is considering a project with an initial cost of $5 million. The project will produce cash inflows of $2 million a year for five years. The firm has a weighted average cost of capital of 13%. Assume that the project has an average risk level as the whole firm. What is the net present value of the project? O $3.26 million O $4.48 million O $1.58 million O $2.03 million Question 20 Daffodil Inc. has a cost of equity of 16 percent and an after-tax cost of debt of 4 percent. The firm's weighted average cost of capital is 13.6 percent. What is the firm's debt-equity ratio (D/E)? 0.33 O 0.50 0.25 0.40ces A firm evaluates all of its projects by applying the IRR rule. Year Cash Flow 161,000 0 55,000 1 84,000 2 68,000 3 What is the project's IRR? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Internal rate of return % If the required return is 12 percent, should the firm accept the project?Question 4 Given the initial investment in a factory processing equipment as Ghc500,037. Let the opportunity cost of capital for the industry be 10% p.a. Assuming that the equipment is capable of generating an after-tax returns of Ghc115,000 for the first 5 years and Ghc65000 for the 6th year and Ghc53400 for the 7th year. a. Find the Net Present Value (NPV) b. Determine the Internal Rate of Return c. Identify three ways in which the Net Present value is superior to the Internal Rate of return as investment criteria
- Question 23 Haig Aircraft is considering a project that has an up-front cost paid today at t = 0. The project will generate positive cash flows of $47,212 a year at the end of each of the next 3 years. The project's NPV is $40,927 and the company's WACC is 14.4%. What is the project's regular payback? 1.74 years 2.64 years O 2.04 years 1.44 years 2.34 yearsQ5 From the attached please answer part G a. Determine the initial outlay of the project.b. Calculate the annual after-tax operating cash flow for Years 1 -5.c. Determine the terminal year non-operating cash flow in year 5:d. Taking into consideration all the information given, determine the Net Present Value of the project and advice the company on whether to invest in the new line of product.e. What is the estimated Internal Rate of Return (IRR) of the project?f. Should the project be accepted based on the IRR? g. Calculate to the following for Pharmos considering its tax rate of 25 percent. i. Total Market Value for the Firm ii, After-tax cost of Loaniii. After-tax cost of Bondsiv. Cost of Equityv. Cost of Preferred Stockvi. Weighted Average Cost of Capital (WACC)Question 17 The net cash flows for two projects, A and B, are as follows: Year o 3 -220000 -5000 122000 130000 -60000 -10000 -120000 200000 1 2 A Given a discount rate of 4.5%: Blank 1: Calculate the net present value of project A. Blank 2: Estimate the IRR of project A. Write your answer as a percent %. If your answer has a decimal, round to 2 places. Blank # 1 Blank # 2