XYZ is considering a 3-yr project. The initial outlay is -$120,000, annual cash flow is $50,000 and the terminal cash flow is $10,000. The required rate of return (cost of capital) is 15%. The net present value is $736.42. What if the annual cash flow increases to $51,000 instead? Re-calculate the NPV.

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A: The question is based on the concept of Financial Management.

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A: GIVEN, initial investment = $9670 years = 5 after tax cashflow = $3000 r= 8%

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A: NPV = Present value of cashflows - Initial outlay PI = Present value of cashflows /Initial outlay

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A: Profitability index (Present Value / Initial Investment)

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A: NPV -  Net Present Value is the net of present value of cash inflow in future and cash outflow…

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A: Formulas:

Q: what is the project's APV?

A: Adjusted Present Value (APV): APV represents the present worth of the project when financed with…

Q: What is the project's NPV?

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A: Excel Spreadsheet:

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Q: XYZ is considering a 3-yr project. The initial outlay is -$120,000, annual cash flow is $50,000 and…

A: Calculation of Net present value (NPV):Answer:Net present value (NPV) is $4,988.13

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A: FORMULA NPV = [CF*(1-(1+R)-N)/R]-CF0 Where NPV - Net present value CF - Annual cash inflow i.e.…

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A: NPV = present value of future cashflows

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A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: A project with an IRR of 30% A.E. where the internal opportunity rate is 20% A.E. (annual…

A: given, IRR = 30% R=20%

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A: Solution: Initial investment = P235,000 Annual cost savings = P70,110

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Q: A project requires an initial investment of $225,000 and is expected to generate the following net…

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Q: IRRs

A: IRR stands for internal rate of return is a process of computing the percentage of return over…

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.