Consider an investment with the following cash flows: Year Cashflows PV of P 1 @ 14% 0 (P 31,000) 1.000 1 10,000 .877 2 20,000 .770 3 10,000 .675 4 10,000 .592 Salvage value 5,000 The cost of capital is 14%. What is the profitability index (PI)? a. 1.842 b. 1.824 c. 1.482 d. 1.284
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Consider an investment with the following cash flows: Year Cashflows PV of P 1 @ 14% 0 (P 31,000) 1.000 1 10,000 .877 2 20,000 .770 3 10,000 .675 4 10,000 .592 Salvage value 5,000 The cost of capital is 14%. What is the profitability index (PI)?
a. 1.842
b. 1.824
c. 1.482
d. 1.284
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- Consider an investment with the following cash flows: Year Cashflows PV of P 1 @ 14% 0 (P 31,000) 1.000 1 10,000 .877 2 20,000 .770 3 10,000 .675 4 10,000 .592 Salvage value 5,000 The cost of capital is 14%. What is the profitability index (PI)? 1.842 1.824 1.482 1.284What is the NPV of the estimated cash flows for the following project using a Weighted Average Cost of Capital of 7.0%? Year 0 1 2 3 Cash Flow -140 50 70 90 Group of answer choices 47.54 38.63 59.94 70.00 41.34Consider the following cash flow year cash flow -1000 TL 2 +300 TL 3 +300 TL 4 +300 TL +300 TL Calculate the rate of return for an investment of 1000 TL
- 16. You are considering an investment with the following cash flows: Year Cash Flow 0 -$50,000 1 $ 7,000 2 $ 4,000 3 $9,000 4 $61,000 What is the internal rate of return (IRR) for this investment? SHOW WORK1- Information about the investment project is as follows. Discount rate (r) = 20% Year Net Cash Flows (TL) 0 -10.000.000 one - 6.000.000 2nd - 2,000,000 3 30.000.000 4 40.000.000 a) Calculate the net present value of the investment. Please interpret with the reasons whether the investment project will be accepted or not according to your result. b) Calculate the internal rate of return of the project using the adjusted internal rate of return method. Interpret the result you found. Explain why the adjusted internal rate of return method was used for the solution. Show the equation you created. You can reach the result by using the excel function. c) Calculate the profitability index of the investment and interpret your resultCalculate the internal rates of return of the following investment: Net investment -$1,000 Year 0 Net cash flows +6,000 Year 1 -11,000 Year 2 +6,000 Year 3 Round your answers to the nearest whole number and enter them in ascending order. IRR1: % IRR2: % IRR3: %
- What is the present value of an investment with the following cash flows? Year 1 $14,000 Year 2 $20, 000 Year 3 $30,000 Year 4. $ 43,000 Year 5. $ 57,000 Use a 7% discount rate, and round your answer to the nearest $1. a. $128, 487 b. $107, 328 c. $112, 346 d. $ 153, 2721- Information about the investment project is as follows. Discount rate (r) = 20% Year Net Cash Flows (TL) -10.000.000 1 - 6.000.000 - 2.000.000 3 30.000.000 4 40.000.000 a) A) Calculate the net present value of the investment. Please interpret with the reasons whether the investment project will be accepted or not according to your result. b) Calculate the internal rate of return of the project using the adjusted internal rate of return method. Interpret the result you found. Explain why the adjusted internal rate of return method was used for the solution. Show the equation you created. You can reach the result by using the excel function. c) Calculate the profitability index of the investment and interpret your result.What is the profitability index of an investment with cash flows in years 0 thru 4 of -340, 120, 130, 153, and 166, respectively, and a discount rate of 13%? A. 0.15 B. 0.22 C. 0.35 D. 0.42 E. 0.55
- What is the expected return of the following portfolio of investments, Investment r Amount Invested DEF 4% $30,000 JKL 24 25,000 TUV 14 45,000If there are multiple roots, then use an external investing rate of 12% and an external borrowing rate of 6%. Compute the rate of return on an investment having the following cash flow. Year Cash Flow |-s 1000 1 750 2-9 300 10 -2500Consider the following projects: Cash Flows ($) Co Project D E -11, 100 -21, 100 C₁ 22, 200 34,500 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 11%. a. Calculate the profitability index for each project. b-1. Calculate the profitability-index using the incremental cash flows. b-2. Which project should you choose?
