Ms. Rahat hails from a business family. She is considering starting a supermarketwith an investment of OMR 100,000. She has provided the following informationabout two possible locations to start the supermarket. Her family had advised toaccept the project which recovers the funds within 3 yearsParticularsSupermarket at Maabela Supermarket at Al AnsabInitial Investment100,000 OMR100,000 OMRCost of capital10%12%40,00050,00040,00060,00040,00020,000| Year 1Year 2Year 3Evaluate the above offers using the investment evaluation techniques mentionedbelow without using Excel and mentioning the steps.: All calculations steps are tobe provideda. Pay-back periodb. Discounted Pay-back periodc. Internal Rate of Return (IRR)

The payback period is the amount of time required where cash flows have been enough to recover the…

Ms. Rahat hails from a business family. She is considering starting a supermarket with an investment of OMR 100,000. She has provided the following information about two possible locations to start the supermarket. Her family had advised to accept the project which recovers the funds within 3 years wwww w Supermarket at Maabela Supermarket at AI Ansab 100,000 OMR Particulars Initial Investment 100,000 OMR Cost of capital 10% 12% 40,000 50,000 40,000 60,000 40,000 20,000 Year 1 Year 2 Year 3 Evaluate the above offers using the investment evaluation techniques mentioned below without using Excel and mentioning the steps.: All calculations steps are to be provided a. Pay-back period b. Discounted Pay-back period c. Internal Rate of Return (IRR)

Ms. Rahat hails from a business family. She is considering starting a supermarket with an investment of OMR 100,000. She has provided the following information about two possible locations to start the supermarket. Her family had advised to accept the project which recovers the funds within 3 years wwww w Supermarket at Maabela Supermarket at AI Ansab 100,000 OMR Particulars Initial Investment 100,000 OMR Cost of capital 10% 12% 40,000 50,000 40,000 60,000 40,000 20,000 Year 1 Year 2 Year 3 Evaluate the above offers using the investment evaluation techniques mentioned below without using Excel and mentioning the steps.: All calculations steps are to be provided a. Pay-back period b. Discounted Pay-back period c. Internal Rate of Return (IRR)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 10PA: The Ham and Egg Restaurant is considering an investment in a new oven that has a cost of $60,000,...

See similar textbooks

Similar questions

Ms. Rahat hails from a business family. She is considering starting a supermarket with an investment of OMR 100,000. She has provided the following information about two possible locations to start the supermarket. Her family had advised to accept the project which recovers the funds within 3 years Particulars Supermarket at Maabela S 100,000 OMR Supermarket at Al Ansab 100,000 OMR Initial Investment Cost of capital 10% 12% Year 1 40,000 60,000 Year 2 50,000 40,000 20,000 Year 3 40,000 Evaluate the above offers using the investment evaluation techniques mentioned below without using Excel and mentioning the steps.: All calculations steps are to be provided a Modified Internal Rate of Return (MIRR)
Ms. Rahat hails from a business family. She is considering starting a supermarket with an investment of OMR 100,000. She has provided the following information about two possible locations to start the supermarket. Her family had advised to accept the project which recovers the funds within 3 years Supermarket at Maabela Supermarket at Al Ansab 100,000 OMR Particulars Initial Investment 100,000 OMR Cost of capital 10% 12% 60,000 40,000 20,000 Year 1 40,000 50,000 40,000 Year 2 Year 3 Evaluate the above offers using the investment evaluation techniques mentioned below without using Excel and mentioning the steps.: All calculations steps are to be provided a- Internal Rate of Return (IRR) b- Modified Internal Rate of Return (MIRR) I. States) 92°F Clea
Assume you are the finance manager of Salalah Mineral Water Company, and the company is considering investing in one of the three projects. The life for the Projects Amal, Sara and Project Farahl is 5 years. Project Amal costs OMR. 17030, and Project Farah costs OMR.17030. The discount rate/cost of capital is 2.55%. Required: Use the following techniques to help company to decide which Machine is better and justify why? a) Payback period b) Discount payback period c) Net Present Value d) Present value index -Profitability index. Year Project Amal Project Fatima 1 7440 8300 2 8096 9609 3 5440 8300 4 9096 9609 9696 9508 LO
Ramona Garcia will be remodeling her kitchen before she places her home on the market to sell. She researched what three local companies would charge her for the remodeling and their best financing option for each company. Her research revealed the following results. Company Total Remodeling Cost Financing Terms Ramona is Considering Large Home Improvement Store $13,200 Financing through the bank servicing the national home improvement company: 1 year 0% financing with a minimum monthly payment of $100; 16.99% APR for the remaining 3 years Local Small Business Home Improvement Company $11,800 Financing through her local credit union: 3% origination fee to be paid first then 7.5% APR for 5 years Online Construction Business $10,200 Financing through an online banking service: $1,000 applied toward the project before payback begins then 11.9% APR for 4 years. Calculate the monthly payments for 2 of these options given that interest is compounded monthly. What…
Case Study Your mother, who is an OFW, is coming home in six months. The last time you spoke to her via online video call, she asked you to suggest three small businesses to invest in. She said that she has allotted P500,000 as capital that would be divided between the three businesses that you will recommend. You scribbled some possible businesses and came up with the following options:
Ashley projects that she can get $100,000 cash per year for 5 years on a real estate investment project. If Ashley wants to earn a rate of return of 9%, what is the maximum that she should pay for the investment? (rounded to the nearest dollar)A. $360,478 B. $446,429 C. $560,000 D. $388,965
Ashley projects that she can get $130,000 cash per year for 5 years on a real estate investment project. If Ashley wants to earn a rate of return of 10%, what is the maximum that she should pay for the investment? (PV of $1 and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Round your answer to the nearest dollar. Multiple Choice O $430,576 $598,000 $492,802 $88,476 Prev 1 of 35 MacBook Air Next >
John Doe is thinking about investing in a coffee franchise that will need an initial expenditure of $75,000. He did his research and found that after-tax cash flows on the investment should be about $15,000 per year for the next 7 years. The franchiser stated that John Doe would generate a 20 percent return. His cost of capital is 10 percent. Find the following: the PVB the PVC the NPV the IRR (Hint: Use interpolation, IRR is between 8 percent and 10 percent.)
Following the last question - John is evaluating the idea to open an ice cream shop on a piece of land. The followings are what he might include in the cash flows: Instead, John can earn $120,000 if he decides to sell the land today. He bought this land for $350,000 two years ago. • Outfitting the space for an ice cream shop would require a capital expenditure of $150,000 today. It'll require an investment of $30,000 in inventories for making the ice creams today. What are the opportunity costs of opening the ice cream shop? 1 · . -$120,000 O-$180,000 O-$350,000 O-$270,000 4
Julie wants to borrow $10,250 from you. She has offered to pay you back $12,250 in a year. If the cost of capital of this investment opportunity is 12%, what is its NPV? Question content area bottom Part 1 The NPV of the investment is $enter your response here. (Round to the nearest cent.)
Kay Sadilla is considering investing in a franchise that requires an initialoutlay of $75,000. She conducted market research and found that after-taxcash flows on the investment should be about $15,000 per year for the next7 years. The franchiser stated that Kay would generate a 20 percent return.Her cost of capital is 10 percent. Find the following:a. The PVBb. The PVCc. The NPVd. The IRR
A person needs to have $15,000 at the end of 6 years and $20,000 at the end year 7 to fulfill his goal. He is willing to invest a lump sum on two deposits today and leave the money untouched to the moment when the money will be needed. Calculate required investment returns he will need to earn to reach her goal knowing that he can invest now: a) $12,000| b) $14,000 c) $16,000