Beam Cable Company is considering investing $450,000 in telecommunications equipment that has an estimated life of four years with no residual value. The cash inflows are as shown below: Year 1 2 3 4 The present value of $1: 10% A 1 $120,000 235,000 140,000 98,000 23 11% 0.909 0.901 0.826 0.812 0.751 0.731 between 9% and 10% 12% 0.893 0.797 0.712 13% 0.885 0.783 0.693 14% 0.877 0.769 0.675
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- Gallant Sports s considering the purchase of a new rock-climbing facility. The company estimates that the construction will require an initial outlay of $350,000. Other cash flows are estimated as follows: Assuming the company limits its analysis to four years due to economic uncertainties, determine the net present value of the rock-climbing facility. Should the company develop the facility if the required rate of return is 6%?Consolidated Aluminum is considering the purchase of a new machine that will cost $308,000 and provide the following cash flows over the next five years: $88,000, 92,000, $91,000, $72,000, and $71,000. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return in Excel, see Appendix C.Giant Machinery Ltd is considering investing in one of the two following Projects to buy newequipment. Each project will last 5 years and have no salvage value at the end. The company’s requiredrate of return for all investment projects is 9%. The cash flows of the projects are provided below.Project 1 Project 2Cost $175,000 $185,000Future Cash FlowsYear 1Year 2Year 3Year 4Year 576,00083,00067,00065,00055,00087,00078,00069,00065,00057,000Required:a) Identify which project should the company accept based on the NPV method. (Note: Please round up the result of each calculation of PV to 2 decimal places only for simplification)b) Identify which project should the company accept based on the simple payback method if thepayback criteria is a maximum of 2 years. c) Which project Giant Machinery should choose if two methods are in conflict.
- Duo Corporation is evaluating a project with the following cash flows: Year Cash Flow -$ 30,000 012345 12,200 14,900 16,800 13,900 -10,400 The company uses an interest rate of 8 percent on all of its projects. Calculate the MIRR of the project. (Do not round intermediate calculation your answer as a percent rounded to 2 decimal places, e.g., 32.16.) MIRR %The management of Advanced Alternative Power Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows: Year Wind Turbines Biofuel Equipment 1 $160,000 $320,000 2 160,000 320,000 3 160,000 320,000 4 160,000 320,000 Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.352 2.991 6 4.917 4.355 4.111 3.784 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 The wind turbines require an investment of $456,800, while the biofuel equipment requires an investment of $971,840. No residual value is expected from either project. Required: 1a. Compute the net present value for each project. Use a rate of 10% and the present…Solo Corp, is evaluating a project with the following cash flows: Cash Flow -$28,200 10,400 Year 0 12440 3 5 13,100 15,000 12,100 8,600 The company uses a discount rate of 11 percent and a reinvestment rate of 8 percent on all of its projects. MIRR Calculate the MIRR of the project using the discounting approach. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) %
- "It is estimated that a certain piece of equipment can save $16820 per year in labor and materials costs. The equipment has an expected life of 6 years and no market value. If the company must earn a 4.77% annual return on such investments, how much could be justified now for the purchase of this piece of equipment? Draw a cash-flow diagram from the company s viewpoint." A) 157789.82 B 86004.7 C 154892.87 D 128687.86 E 178326.02The management of Advanced Alternative Power Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows: Year Wind Turbines Biofuel Equipment 1 $310,000 $620,000 2 310,000 620,000 3 310,000 620,000 4 310,000 620,000 Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.352 2.991 6 4.917 4.355 4.111 3.784 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 The wind turbines require an investment of $802,590, while the biofuel equipment requires an investment of $1,770,100. No residual value is expected from either project. Required: 1a. Compute the net present value for each project. Use a rate of 10% and the present…Davis Chili Company is considering an investment of $37,000, which produces the following inflows: Year Cash Flow $17,000 16, 000 13,000 1 2 Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Determine the net present value of the project based on a zero percent discount rate. Net present value b. Determine the net present value of the project based on a 10 percent discount rate. (Do not round intermediate calculations and round your answer to 2 decimal places.) Net present value c. Determine the net present value of the project based on a 16 percent discount rate. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.) Net present value
- Juniper Corporation is considering two alternative investment proposals with the following data: Proposal X Proposal Y Investment $810,000 $466,000 Useful life 8 years 8 years Estimated annual net cash inflows for 8 years $130,000 $70,000 Residual value $58,000 $− Depreciation method Straight−line Straight−line Required rate of return 13% 10% What is the accounting rate of return for Proposal X? (Round any intermediary calculations to the nearest dollar, and round your final answer to the nearest hundredth of a percent, X.XX%.)The management of Advanced Alternative Power Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows: Year Wind Turbines Biofuel Equipment 1 $310,000 $650,000 2 310,000 650,000 3 310,000 650,000 4 310,000 650,000 Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.352 2.991 6 4.917 4.355 4.111 3.784 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 The wind turbines require an investment of $885,050, while the biofuel equipment requires an investment of $1,974,050. No residual value is expected from either project. Required: 1a. Compute the net present value for each project. Use a rate of 10% and the present…"It is estimated that a certain piece of equipment can save $22145 per year in labor and materials costs. The equipment has an expected life of 6 years and no market value. If the company must earn a 15.96% annual return on such investments, how much could be justified now for the purchase of this piece of equipment? Draw a cash-flow diagram from the company s viewpoint." A 62425.06 B 81685.01 170143.66 D 184740.67 E 61075.73