Problem. Assume the following cash flow for 2 projects. Assuming that the cash flows are occurring at the end of the year. Find the payback period for both these projects. Year Project 1 Project 2 -1000 600 -1000 100 400 400 and for the exclusive use of SLU. Reproduction, storing in a retrieval system, distributing, uploading or posting online, or transmiting in any form or by tronic, mechanical, photocopying, recording, or otherwise of any part of this document, without the prior written permission of SLU, is strictly prohibite 200 200 600 600 100 700 012 345

Problem. Assume the following cash flow for 2 projects. Assuming that the cash flows are occurring at the end of the year. Find the payback period for both these projects. Year Project 1 Project 2 -1000 600 -1000 100 400 400 and for the exclusive use of SLU. Reproduction, storing in a retrieval system, distributing, uploading or posting online, or transmiting in any form or by tronic, mechanical, photocopying, recording, or otherwise of any part of this document, without the prior written permission of SLU, is strictly prohibite 200 200 600 600 100 700 012 345

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Payback period. Given the cash flow of two projects-A and B-in the following table, and using the payback period decision model, which project(s) do you accept and which proje period for recapturing the initial cash outflow? For payback period calp What is the payback period for project A? 6 Data Table - X years (Round to one decimal place.) (Click on the following icon D in order to copy its contents into a spreadsheet.) Cash Flow B. Cost Cash flow year 1 Cash flow year 2 Cash flow year 3 Cash flow year 4 Cash flow year 5 Cash flow $12,000 $6,000 $6,000 $6,000 $100,000 $20,000 $10,000 $40,000 $6,000 $30,000 SO $6,000 $6,000 year 6. SO Print Done
Solve the following problem by applying the method used in the video uploaded in your Pewertaint presentation. You may check Lesson 04 Video 02 Payback pierrad Problem. Assume the following cash flow for 2 projects. Assutming that the cash flows are occurring at the end of the year. Find the payback period for both these projects Year Project 1 Project 2 1000 600 1000 100 400 200 200 100 400 600 600 700
M2P4U4. Payback Period Problem. Assume the following cash flow for 2 projects. Assuming that the cash flows are occurring at the end of the year. Find the payback period for both these projects. SHOW COMPLETE SOLUTION. Year Project 1 Project 2 -1000 600 400 -1000 100 400 200 600 200 100 600 700 O123 45
A project has the following cash flows set out below. What is the profitability index of this project if the relevant discount rate is 2 percent? Enter your final answer to two decimal places. Year Cash flow 0 -1,745 1 537 2 2,066 3 3,912
Assignment equipment, the useful life of which is four years. The net cash flows for the two projects are provided in the table below: Net Cash Flow (GH¢) Project Year 1 Year 2 Year 3 Year 4 1 2,550 2,450 1,700 1,400 1,240 1,550 2,100 3,800 end of its life. i. Find the payback period for each project. Establish the net present value for each project using discount rate of 20%. Establish the net present value for each project using discount rate of 25%. Determine the internal rate of return for each project. iii. iv. Using the payback criterion and the internal rate of return criterion advice the proprietor on the project he should undertake, giving reasons for your choice of project. V. 70
NPV profile of a project. Given the following cash flow of Project L-2, draw the NPV profile. Hint: Be sure to use a discount rate of zero for one intercept (y-axis) and solve for the IRR for the other intercept (x-axis). (Click on the following icon in order to copy its contents into a spreadsheet.) Year 0 = - $300,000 Year 1= $42,000 Year 2 = $77,000 Year 3 = $111,000 Year 4 = $140,000 What is the NPV of Project L-2 where zero is the discount rate? $ 70000.00 (Round to the nearest dollar.) What is the IRR of Project L-2? % (Round to two decimal places.)
(Mutually exclusive projects and NPV) You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows: Project A Cash Flow Project B Cash Flow $(102,000) Year 0 1 2340 5 $(102,000) 35,000 35,000 35,000 35,000 35,000 0 0 0 0 230,000 (Click on the icon in order to copy its contents into a spreadsheet) If the appropriate discount rate on these projects is 12 percent, which would be chosen and why? The NPV of Project A is S. (Round to the nearest cent.)
NPV profile of a project. Given the following cash flow of Project L-2, draw the NPV profile. Hint. Be sure to use a discount rate of zero for one intercept (y-axis) and solve for the IRR for the other intercept ( x-axis). (Click on the following icon ◻ in order to copy its contents into a spreadsheet.) Year 0=-$300,000 Year 1=$50,000 Year 2=$79,000 Year 3=$118,000 Year 4=$130,000 What is the NPV of Project L-2 where zero is the discount rate? $ (Round to the nearest dollar.) What is the IRR of Project L-2? % (Round to two decimal places.) Which of the graphs below best fits the NPV profile of the project? Click on the magnifying glass icon to see an enlarged version of each graph. (Select the best response.) B. D.
Use the table for the question(s) below. Consider the following two projects: Year 0 Project Cash Flow A - 100 40 50 B - 73 30 30 The payback period for project A is closest to: OA. 2.0 years O B. 2.4 years C. 2.2 years O D. 2.5 years Year 1 Cash Flow Year 2 Cash Flow Year 3 Cash Flow 60 30 Year 4 Cash Flow N/A 30 Discount Rate .15 .15
Payback period. Given the cash flow of two projects—A and B—and using the payback period decision model, which project(s) do you accept and which project(s) do you reject if you have a three-year cutoff period for recapturing the initial cash outflow? For payback period calculations, assume that the cash flow is equally distributed over the year. Cash Flow A B Cost $14,000 $110,000 Cash flow year 1 $5,600 $44,000 Cash flow year 2 $5,600 $33,000 Cash flow year 3 $5,600 $22,000 Cash flow year 4 $5,600 $11,000 Cash flow year 5 $5,600 $0 Cash flow year 6 $5,600 $0
(IRR calculation) Determine the IRR on the following projects: a. An initial outlay of $10,000 resulting in a free cash flow of $1,806 at the end of each year for the next 9 years b. An initial outlay of $10,000 resulting in a free cash flow of $2,026 at the end of each year for the next 19 years c. An initial outlay of $10,000 resulting in a free cash flow of $1,102 at the end of each year for the next 14 years d. An initial outlay of $10,000 resulting in a free cash flow of $2,842 at the end of each year for the next 6 years a. What is the IRR of a project with an initial outlay of $10,000 resulting in a free cash flow of $1,806 at the end of each year for the next 9 years? % (Round to two decimal places.)
(IRR calculation) Determine the IRR on the following projects: a. An initial outlay of $12,000 resulting in a single free cash flow of $17,123 after 8 years b. An initial outlay of $12,000 resulting in a single free cash flow of $50,395 after 14 years c. An initial outlay of $12,000 resulting in a single free cash flow of $107,058 after 23 years d. An initial outlay of $12,000 resulting in a single free cash flow of $13,576 after 5 years Question content area bottom Part 1 a. What is the IRR of a project with an initial outlay of $12,000 resulting in a single free cash flow of $17,123 after 8 years? enter your response here% (Round

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