Q: Find expected return for G.
A: Expected Return is the amount of loss or profit an investor expects to receive on an investment.
Q: Required: a. Determine the discounted rate of return.
A: Formula: Discount rate= Lower Rate +Lower NPV×Higher Rate-Lower RateLower NPV-Higher NPV
Q: Define the term internal rate of return?
A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…
Q: Set up an illustrative probability distribution for an investment
A:
Q: Why is partitioning an internal rate of return important?
A: Introduction: There are two cash flow components which can form the portioning of internal rate of…
Q: Please solve using Rate of Return method.
A: Rate of return is the rate at which return is expected from any investment. This defines the gain or…
Q: Which are the more complex applications of rate-of-return techniques/
A: The question is based on the concept of rate of return and its application in finance
Q: Define return rate
A: The return rate can be calculated on various assets and can be used to compare various investments.…
Q: What is the internal rate of return?
A: Internal rate of return is the discount rate at which present value of cash inflows equals outflows…
Q: e average rate of return on investment,
A: Average rate of return of investment = Average net income * 100/(Initial investment-Salvage value)
Q: Simple Rate of Return
A: Simple rate of return = Net operating income * 100/ Cost of investment
Q: What is the significance of finding the internal rate of return?
A: IRR helps to check the viability of the project. If IRR is more than Kc than Project seems to be…
Q: Required: i. Using present-value method, determine the best alternative ii. Using the internal rate…
A: By using present value method , debt alternative carrying interest of 10% is the best alternative…
Q: ear. Calculate the rate of return of the investment.
A: Rate of return is the internal rate of return earned. Rate of return = 20.00%
Q: what is meant by the required rate of return
A: The return which is expected to be earned by investing in a security is known as Required Rate of…
Q: Calculate the average rate of return on the investment.
A:
Q: Internal rate of return
A: Internal rate of return- It is the rate of discount at which the sum of discounted cash inflows…
Q: Define payback period.
A: Capital investment analysis: Capital investment analysis is the process of decision making, planning…
Q: Define Expected rate of return
A: Introduction: Usually return is a kind of profit that comes from your investment. Example, an amount…
Q: What is meant by partitioning the internal rate of return? Why is this procedure meaningful?
A: Internal rate of return is defined as the annual rate of earnings on an investment and unlike income…
Q: How can we calculate the Rate-of-Return with Excel?
A: The question is based on the concept of calculation of rate of return (ROR), (ROR) is percentage…
Q: e Internal rate of return
A: The following problem can be solved using XIRR function in excel.
Q: What do we mean by internal rate of return (IRR)?
A: Internal rate of return : Internal rate of return is one of the techniques used in capital budgeting…
Q: calculate internal rate of return acounting rate of return pay back period
A: Data given: Cost of machine = RM 3,500,000 Useful life of machine = 5 years Residual value = RM…
Q: find the pay-back period with excel.
A: The payback period is the time period in which the cash flows fully covered the initial cash…
Q: What formula to use to find Payback Period and NPV? (in Excel)
A: NPV or Net Present Value is the present value of all net cash cashflow on a provided discount rate.…
Q: Explain real rate of return
A: This is the raw rate of return adjusted with inflation. It is used to ascertain the effective return…
Q: Explain expected rate of return
A: Return: Return is defined as the money attained or lost on an investment through certain time…
Q: .Calculate (a) net present value, (b) payback period, and (c) internal rate of return.
A: Net Present Value is the excess of present value of cash inflow to that of present value of cash…
Q: Present the internal rate of return criterion and its strengths and weaknesses.
A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…
Q: What is meant by the incremental cost of refinancing?
A: Refinancing refers to making change in the capital structure of the company by replacing the…
Q: /hat is the exact rate of return?
A: MACHINE A PV FACTOR PRESENTVALUE A 0 FIRST COST -8000 8000…
Q: Explain normal rate of return.
A: Rate of return: Rate of return is the return on investment. it might be a loss or profit on an…
Q: Explain realized rate of return
A: The return generated by an investment is any asset class is the normalized rate of return. When the…
Q: How is the payback period is calculated?
A: Payback period is the amount or length of time taken by an investment to recover its cost.
Q: Define realized rate of return
A: Return can be defined as the profit or interest earned by the investor on the investment, which…
Q: What is the machine's payback period?
A: Payback period=Last period with a negative cumulative cash flow+(Absolute value of cumulative cash…
Q: Explain the process of Rate-of-Return Calculation with Excel?
A: Rate of return is the rate expressed in terms of percentage which an investor expects from the…
Q: Explain how to calculate net realizable value.
A: Net realizable value refers to the total amount of money which a company will get from selling the…
Q: One of the advantages of Internal Rate of Return is:
A: The correct answer is b. It gives the closet rate of return.
Q: Explain an example how to calculate internal rate of return.
A: IRR is the return actually earned by the investor and discount rate is the return which the investor…
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- Pepper Co is contemplating three available investment opportunities, the cash flows of which are given below. Project Initial investment Cash flow Y1 Y2 Y3 Y4 Y5 $000 $000 $000 $000 S000 $000 (125) 50 50 50 50 (120) 15 15 15 15 200 (170) 120 In each case the initial investment represents the purchase of plant and equipment whose realisable value will be 20% of initial cost, receivable in addition to the above flow at the end of the life of the project. 80 Required: For each of the three projects: (a) Calculate the accounting rate of return (based on the average investment method) (b) Calculate the payback period (c) Calculate the net present value using a discount rate of 10% (d) Calculate the internal rate of returnThe net present value of four projects is given below: Project W: $24,000 Project X: $ 11,000 Project Y: $20,000 Project Z: $14,000 The four projects given above require the same amount of investment. How would you rank them using net present value (NPV) method? Group of answer choices X, Z, Y, W W, X, Y, Z W, Y, Z, XX, Y, Z, WYou are evaluating the following two mutually exclusive projects: Project Year 0 Year 1 Year 2 A -$100 $95 $140 B -$50 $50 $120 Both have 15% cost of capital. Using NPV profiles for Projects A and B, determine which project would be chosen under each of IRR rule and NPV rule. (Hint: Draw the NPV profiles.) Group of answer choices A under IRR rule, and B under NPV rule B under IRR rule, and A under NPV rule A under both IRR and NPV rules Cannot be determined. B under both IRR and NPV rules
- Connor Corporation is considering two projects (see below) For your analysis assume these projects are mutually exclusive with a required rate of return of 10% project 1 Initial investment =$465,000 cash inflow Year 1= $510,000 project 2 Initial investment=$700,000 cash inflow Year 1= $850,000 Compute the following for each project NPV(net present value) PI(profitability index) IRR(internal rate of return show workABC Company has calculated the net present value of two investment opportunities but must decide which option to pursue: Project X: Present value of cash flows = $117,000 Investment = $100,000 Net present value = $17,000 Project Z: Present value of cash flows = $138,000 Investment = $120,000 Net present value = $18,000 Complete the following: Present value ratio of Project X = Present value ratio of Project Z = Decision = Invest in (Project X/Project Z)Consider the following two mutually exclusive investment projects:Project Cash Flowsn A B 0 -$4,000 -$8,5001 $400 $11,5002 $7,000 $400Assume that the MARR = 15%.(a) Using the NPW criterion, which project would you select?(b) On the same chart, sketch the PW(i) function for each alternative fori = 0% and 50%. For what range of i would you prefer Project B?
- Daymore plc is currently considering three investment opportunities. The following is the details of the investments:-Project A:-1. initial outlay $80m2. Future net inflows Year 1: $190mYear 2: $10mProject B:-1. initial outlay $140m2. Future net inflows Year 1: $180mYear 2: $120mProject C:-1. initial outlay $90m2. Future net inflows Year 1: $10mYear 2: $220mThe company has a capital budget that is restricted in the year of the investment and it will not be possible to undertake all three projects in full. The investment opportunities are independent of one another and each project is divisible (that is, it is possible to undertake part of an investment and to receive a pro-rata return). The cost of capital of the company is 12% and the company uses the net present value method of investment appraisal.Required:Calculate and determine the ranking of the three investment opportunities? (The ranking for the first choice, second choice, and third choice is 1, 2, and 3 respectively). Show…Lewis Services is evaluating six investment opportunities (projects). The following table reflects each project's net present value NPV and the respective initial investments required. All of these projects are independent. Project NPV Investment 2,500 2,500 II 4,000 20,000 II 7,500 30,000 IV 8,000 40,000 2,000 10,000 VI 2,500 5,000 Lewis has an investment constraint of P50,000. Which combination of projects would represent the optimal investment that should be recommended to Lewis Services' management? O I. II, and VI O I, II, V, and VI O , II, II, IV, V, and VI OI, II, III, V, and VIGama industry has the amount of $ 600000 for investment at MARR= 15%. The manager of this company considered three different projects with rates of return as project 1 = 24% , project 2 = 18% and project 3= 30%). these projects have initial investments as $100,000 ,$ 300000, and $200000 respectively. The overall rate of return will be: Select one: a. 0.23 b. 0.26 c. 0.45 d. 0.20
- The following information is available on two mutually exclusive projects. All numbers are in ‘000s. Project Year 0 Year 1 Year 2 Year 3 Year 4 A $700 $300 $300 $400 $400 B $700 $600 $300 $200 $100 a: If the minimum acceptable rate of return is 10%, which project should be selected using the Net Present Value (NPV) method? Which project should be selected if the Internal Rate of Return (IRR) method is used? b: At what cross‐over rate would the firm be indifferent between the two projects? What is the NPV for both projects at the crossover rate? c: How much should cash flow in year 3 for project B increase or decrease in order for NPV(B) to be equal to NPV(A)?Lewis Services is evaluating six investment opportunities (projects). The following table reflects each project's net present value NPV and the respective initial investments required. All of these projects are independent. Project NPV Investment 2,500 2,500 || 4,000 20,000 II 7,500 30,000 IV 8,000 40,000 V 2,000 10,000 VI 2,500 5,000 Lewis has an investment constraint of P50,000. Which combination of projects would represent the optimal investment that should be recommended to Lewis Services' management? O I, II, III, IV, V, and VI O I, III, V, and VI O I, II, III, V, and VI O I, III, and VIDetermine which of the following independent projects should be selected for investment if a maximum of $240,000 is available and the MARR is 10% per year. Use the PW method to evaluate mutually exclusive bundles to perform your analysis. Project Investment, $ NCF, $/Year Life, Years A −100,000 50,000 8 B −125,000 24,000 8 C −120,000 75,000 8 E −220,000 39,000 8 F −200,000 82,000 8