Presented below are the two alternatives with their cash flow details. The initialinvestment fund for both is PhP10 Million.Annual Cash Inflows (in 'ooo)Plan CPhP3,000Plan DPhP1,000Year125,0002,00032,0003,00043,0004,0002,0005Total5,000PHP15.000PhP15.000The rate of return required for both projects is 8 percent compounded annually. Thecash inflows occur at the end of each year. Determine the project to be accepted usingthe NPV method. Show all your computations.

Net Present Value is computed as the difference between the present value of cash inflows and the…

Presented below are the two alternatives with their cash flow details. The initial investment fund for both is PHP10 Million. Annual Cash Inflows (in 'ooo) Plan C PhP3,000 Plan D PhP1,000 Year 1 2 5,000 2,000 3 2,000 3,000 4 3,000 4,000 2,000 5.000 Total PHP15.000 PhP15.000 The rate of return required for both projects is 8 percent compounded annually. The cash inflows occur at the end of each year. Determine the project to be accepted using the NPV method. Show all your computations.

Presented below are the two alternatives with their cash flow details. The initial investment fund for both is PHP10 Million. Annual Cash Inflows (in 'ooo) Plan C PhP3,000 Plan D PhP1,000 Year 1 2 5,000 2,000 3 2,000 3,000 4 3,000 4,000 2,000 5.000 Total PHP15.000 PhP15.000 The rate of return required for both projects is 8 percent compounded annually. The cash inflows occur at the end of each year. Determine the project to be accepted using the NPV method. Show all your computations.

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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You are given the following information about the cash flows for Projects A and B: Project B $12,643.00 $6,264.00 $5.119.00 $4,284.00 $3,265.00 $2,884.00 Year 0 1 2 3 4 5 Given this information, and assuming a risk-adjusted discount rate of 14.0 percent for both projects, determine the internal rate of return (IRR) for the project with the highest net present value (NPV). 26.0818% 25.6301% 25.1784% Project A -$10,356.00 $2,185.00 $4,294.00 $4,642.00 $6,360.00 $3,125.00 O24.2750%
A project has the following cash flows: Year Cash Flow 0 - 25,400 1 11,620 2 13,810 3 -5, 550 4 7,310 The discounting rate is 13% and the reinvestment rate is 15%. What is the MIRR for this project using the combination approach?
For the cash flows given below, find the ERR and evaluate the project when the external reinvestment rate is ε = 10% and MARR = 8%. EOY 0 1 2 234 5 Cash Flow -$10,000 -$2,000 $2,500 $4,000 $4,000 $4,000
The following are the cash flows of two projects: Year Project A Project B 0 $ (400 ) $ (400 ) 1 230 300 2 230 300 3 230 300 4 230 a. Calculate the NPV for both projects if the discount rate is 10%. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Annual cash inflows that will arise from two competing investment projects are given below: Year Investment A Investment B 1 $ 2,000 $ 5,000 2 3,000 4,000 3 4,000 3,000 4 5,000 2,000 $ 14,000 $ 14,000 The discount rate is 12%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: Compute the present value of the cash inflows for each investment.
Annual cash inflows that will arise from two competing investment projects are given below: Year Investment A Investment B 1 $ 4,000 $ 1,000 2,000 2 3,000 3 3,000 2,000 4 4,000 1,000 $ 10,000 $10,000 The discount rate is 9%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: Compute the present value of the cash inflows for each investment. Each investment opportunity will require the same initial investment. Present Value of Cash Flows Year Investment A Investment B 1 2 P 3 4
Better Health Inc. is evaluating two capital investments, each of which requires an up-front (time 0) expenditure of $1.5 million. The projects are expected to produce the following net cash inflows: Year Project A ($) Project B ($) 1 500,000 2,000,000 2 1,000,000 1,000,000 3 2,000,000 600,000 a. What is each project’s IRR? b. What is each project’s NPV if the opportunity cost of capital is 10 percent? 5 percent? 15 percent?
The following are the cash flows of two projects: Year 0 1 2 3 4 Project A $ (220) 100 100 100 100 Project B $ (220) 120 120 120 What are the internal rates of return on projects A and B? Note: Enter your answers as a percent rounded to 2 decimal places. Project A B IRR % %
The following table contains the estimated cash flows of a project. Assume the appropriate discount rate (hurdle rate) is 14%. Answer the following questions: Year Operating Cash Flow 0 -$20,000 1 $7,000 2 $8,000 3 $9,000 4 $4,000 c. What is the IRR of project 1?
7. Consider the following table for the cash flows of an investment account: Time mm/dd/yy 01/01/2015 04/01/2015 08/01/2015 12/31/2015 Contribution -300 +2,000 (a) Calculate the TWRR and the DWRR of the fund. (b) Comment on the results. Fund value before contribution 1,000 500 250 2,800
Given the following information, calculate the Internal Rate of Return (IRR) for the following cash flow. Hint: use linear interpolation method for discount rates 2% and 12%. Project costs and benefits Cash Outflow Year 0 Cash Inflow Year 1 Cash Inflow Year 2 Cash Inflow Year 3 Project -$2580 $977 $930 $955
Please create two 5-year project cash flows with 68,500 TL and 98,600 TL initial investment amounts by filling the missing parts of the table below. Project A Project B Initial Investments Years 68500 TL 98.600 TL Cash Flows 1 37.000 5.000 2 10.000 8.600 3 12.000 10.000 4 5.500 11.000 4.000 64.000 a. According to the payback method which project would you prefer? Why? (19 pts) b. Please list three weak points of the payback method and briefly describe them. (5 pts)

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