Hanse, Inc., has the following two mutually exclusive projects available. Project R -$76,500 26,600 25,600 23,600 17,600 11,700 Project S -$97,200 24,300 24,300 39,300 34,300 13,300 Year a. What is the crossover rate for these two projects? (Do not round intermed O123¢5
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- c) You are given the following pay-offs of three acts A1, A2 and A3, and the states of nature S1, S2 and S3. States of nature A1 A2 A3 S1 25 -10 -125 S2 400 440 400 S3 650 740 750 The probabilities of the states of nature are respectively, 0.1, 0.7 and 0.2. Calculate and tabulate the EMV and conclude which of the acts can be chosen as the best.Following projects, A and B are mutually exclusive. Use a discount rate of 7.6 percent to solve the following. Year 1 2. 3 4 5. Project A -11000 4000 3000 4000 4000 2000 Project B -15000 5000 4000 5000 7000 3000 Calculate the NPV and IRR, and select the project.Tri Star, Inc., has the following mutually exclusive projects: Year Project A Project B 0 –$ 13100 –$ 8500 1 7300 3200 2 6300 2700 3 2,100 5100 Calculate the payback period for each project. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) If the appropriate discount rate is 9 percent, what is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
- The Michner Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (I) 0 -$ 82,000 1 37,600 2 37,600 37,600 Cash Flow (II) -$ 21,700 11, 200 11,200 11, 200 a-1. If the required return is 10 percent, what is the profitability index for each project? Note: Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161. a-2. If the required return is 10 percent and the company applies the profitability index decision rule, which project should the firm accept? b-1. If the required return is 10 percent, what is the NPV for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b-2. If the company applies the NPV decision rule, which project should it take? a-1. Project I Project II a-2. Project acceptance b-1. Project I Project II b-2. Project acceptanceTamarisk Corp. is planning to replace an old asset with new equipment that will operate more efficiently. The following amounts may be relevant to this analysis. Cost of old asset Book value of old asset Selling price of old asset Purchase price of new replacement asset Estimated salvage value of new asset Estimated useful life of new asset Estimated annual net operating cash inflows Discount rate Tax rate $12,000 $2,000 $2,000 $18,800 $2,200 5 years $2,700 11% 20% /year for 5 years Determine which amounts listed are relevant cash flows for Tamarisk Corp. as it considers this asset sale and replacement.Crane Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Project Bono Project Edge Project Clayton Capital investment $164,000 $180,500 $204,000 Annual net income: Year 1 14,420 18,540 27,810 2 14,420 17,510 23,690 3 14,420 16,480 21,630 4 14,420 12,360 13,390 5 14,420 9,270 12,360 Total $72,100 $74,160 $98,880 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.)
- Your division is considering two projects with the following cash flows (in millions): 0 2 3 Project A Project B 1 $4 $12 $7 $5 million -$11 -$20 a. What are the projects' NPVs assuming the WACC is 5%? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. Project A: $ million Project B: $ million What are the projects' NPVs assuming the WACC is 10%? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. Project A: $ million Project B: $ What are the projects' NPVs assuming the WACC is 15% ? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be…Sunland Company is considering three capital expenditure projects. Relevant data for the projects are as follows. Project Investment 22A $243,500 271,400 23A 24A 283,000 Annual Life of Income Project $17,320 6 years 20,600 9 years 7 years 15,700 Annual income is constant over the life of the project. Each project is expected to have zero salvage value at the end of the project. Sunland Company uses the straight-line method of depreciation.Find crossover rate..round upto 6 decimal places. Project A project B-1000-500 950 550 500 350 Options: 7.823300%, 9.725560 %, 6.336595%, 6.369947%
- The Weiland Computer Corporation is trying to choose between the following mutually exclusive design projects, P1 and P2:Year 0123 Cash flows (P1) -$53,000 27,000 27,000 27,000 Cash flow (P2) -$16,000 9,100 9,100 9,100a. If the discount rate is 10 percent and the company applies the profitability index (PI) decision rule, which project should the firm accept?b. If the firm applies the Net Present Value (NPV) decision rule, which project should it take?c. Are your answers in (a) and (b) different? Explain why?The Michner Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (I) Cash Flow (II) 0 -$ 76,000 -$ 34,000 1 29,000 11,000 23,500 17,500 2 3 36,000 42,000 a-1. If the required return is 12 percent, what is the profitability index for each project? Note: Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161. a-2. If the company applies the profitability index decision rule, which project should it take? b-1. If the required return is 12 percent, what is the NPV for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b-2. If the company applies the net present value decision rule, which project should it take? a-1. Project I a-2. Project II b-1. Project I b-2. Project IIThe Michner Corporation is trying to choose between the following two mutually exclusive design projects: Cash Flow (II) -$ 51,000 12,300 32,500 23,500 Year 0 1 2 3 Cash Flow (I) -$ 85,000 34,900 45,000 28,000 a-1. If the required return is 10 percent, what is the profitability index for each project? Note: Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161. a-2. If the company applies the profitability index decision rule, which project should it take? b-1. If the required return is 10 percent, what is the NPV for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b-2. If the company applies the net present value decision rule, which project should it take? a-1. Project I Project II a-2. b-1. Project I Project II b-2. Answer is not complete. Project II Project I 1.058