Suppose you have the following information for a project. Before-Tax Income After-Tax Cash Flows Taxes Cash Flows Year 0 1 2 3 45 -1000 500 340 244 100 100 -72 -33.6 -10.56 24 24 Calculate the present worth of after-tax cash flows. Use an interest rate of 8%. Round your answer to 2 decimal places.
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- Calculate the EAR of the following investment, entered as a percentage (Example: if your answer is 0.145, enter 14.5) Year Number Cashflow 0 -11400 1 3500 2 3000 3 3100 4 2800 Your Answer:Calculate the Payback Period using the following Information All figures are in OMR Initial Investment = 25000 Cash Flow after Tax(CFAT) are as follows : Year 1 : 5000 Year 2 : 5000 Year 3 : 5000 Year 4 : 4000 Year 5 : 6000 4 Years and 6 months 5 Years 5 Years 2 YearsProject B cost $5,000 and will generate after-tax net cash inflows of $500 in year one, $1,200 in year two, $2,000 in year three. $2,500 in year four, and $2,000 in year five. What is the NPV using 8% as the discount rate? For further instructions on net present value in Excel, see Appendix C.
- A real estate investment has the following expected cash flows: Year Cash Flows 1 $15,000 2 14,000 3 19,000 4 21,000 The discount rate is 6 percent. What is the investment’s present value? Round your answer to 2 decimal places; for example 2345.25.What is the present value of a stream of 5 end-of-year annual cash receipts of $3,200 given a discount rate of 13%? (Round your final answers to 2 decimal places.) a. Use the appropriate table (Appendix C: Table 1, Table 2) to answer the above question. b. Use the appropriate built-in function in Excel to answer the above question. a. b. PV of annuity PV of annuitySuppose you receive cashflows of $10 at year 1, $12 at year 2, $14 at year 3 and $16 at year 4. What would be the value of the cashflows at year 2 at a 5% annual interest rate? MUST SHOW FULL WORK (NO EXCELL) a. 38.3458 b. 50.3458 c. 42.0000 d. 12.0000 e. 49.3621
- A real estate investment has the following expected cash flows: Year Cash Flows 1 $14,000 2 19,000 3 19,000 4 25,000 The discount rate is 3 percent. What is the investment’s present value? Round your answer to 2 decimal placesVilas Company is considering a capital investment of $190,600 in additional productive facilities. The new machinery is expected to have a useful life of 5 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $12,700 and $49,600, respectively. Vilas has a 12% cost of capital rate, which is the required rate of return on the investment. Click here to view PV table. (a) Compute the cash payback period. (Round answer to 2 decimal places, e.g. 10.50.) Cash payback period 3.83 years Compute the annual rate of return on the proposed capital expenditure. (Round answer to 2 decimal places, e.g. 10.50.) Annual rate of return 6.66316894 %Calculate the Payback Period using the following Information All figures are in OMR Initial Investment = 10000 Cash Flow after Tax(CFAT) are as follows : Year 1 : 5000 Year 2 : 3000 Year 3 : 2000 Year 4 : 3000 Year 5 : 50000 2.5 Years 3 Years 3 Years and 10 months 3 Years and 2 months
- a) What’s the rate of return you would earn if you paid $1,500 for a perpetuity thatpays $105 per year? b) At a rate of 8%, what is the present value of the following cash flow stream?$0 atTime 0; $100 at the end of Year 1; $300 at the end of Year 2; $0 at the end of Year 3;and $500 at the end of Year 4?For each of the following situations involving single amounts, solve for the unknown. Assume that interest is compounded annually. (/= interest rate, and n=number of years) Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount. (FV of $1. PV of $1. EVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) 1. 2 3. 4. 5. Present Value Future Value 1 $ 36,600 $ 62,000 $ 28,644 $ 76,000 $ 11,758 $ 45,500 68.822 $ 155,000 13,796 $ $ 5% 7% 8% n 20 12 10Average Rate of Return, Cash Payback Period, Net Present Value Method for a Service Company Spanish Peaks Railroad Inc. is considering acquiring equipment at a cost of $288,000. The equipment has an estimated life of 10 years and no residual value. It is expected to provide yearly net cash flows of $36,000. The company's minimum desired rate of return for net present value analysis is 12%. 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 3.353 2.991 6 4.917 4.355 4.111 3.785 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 Compute the following: a. The average rate of return, giving effect to straight-line depreciation on the investment. If required, round your answer to one decimal place. 8 X %