The CFO of the company believes that an appropriate annual interest rate on this investment is 6.5%. What is the present value of this uneven cash Flow stream, rounded to the nearest whole dollar? O $467,500 O $650,014 O $1,475,000
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- A series of cash flows may not always necessarily be an annuity. Cash flows can also be uneven and variable in amount, but the concept of the time value of money will continue to apply. Consider the following case: The Purple Lion Beverage Company expects the following cash flows from its manufacturing plant in Palau over the next six years: Annual Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 $400,000 $20,000 $180,000 $300,000 $350,000 $725,000 The CFO of the company believes that an appropriate annual interest rate on this investment is 9%. What is the present value of this uneven cash flow stream, rounded to the nearest whole dollar? $1,975,000 $1,775,000 $600,000 $1,395,097 Identify whether the situations described in the following table are examples of uneven cash flows or annuity payments: Description Uneven Cash Flows Annuity Payments Debbie has been donating 10% of her salary at the…A series of cash flows may not always necessarily be an annuity. Cash flows can also be uneven and variable in amount, but the concept of the time value of money will continue to apply. Consider the following case: The Purple Lion Beverage Company expects the following cash flows from its manufacturing plant in Palau over the next four years: Annual Cash Flows Year 1 Year 2 Year 3 Year 4 $250,000 $37,500 $180,000 $300,000 The CFO of the company believes that an appropriate annual interest rate on this investment is 6.5%. What is the present value of this uneven cash flow stream, rounded to the nearest whole dollar? $650,014 $1,475,000 $467,500 $1,692,500 Identify whether the situations described in the following table are examples of uneven cash flows or annuity payments: Description Uneven Cash Flows Annuity Payments You recently moved to a new apartment and signed a contract to pay monthly rent to your…A series of cash flows may not always necessarily be an annuity. Cash flows can also be uneven and variable in amount, but the concept of the time value of money will continue to apply. Consider the following case: The Purple Lion Beverage Company expects the following cash flows from its manufacturing plant in Palau over the next six years: Year 1 $400,000 Year 2 $20,000 Annual Cash Flows Year 3 Year 4 $180,000 $300,000 O $600,000 O $1,975,000 O $1,395,097 O $1,775,000 Year 5 $350,000 Year 6 $725,000 The CFO of the company believes that an appropriate annual interest rate on this investment is 9%. What is the present value of this uneven cash flow stream, rounded to the nearest whole dollar? Identify whether the situations described in the following table are examples of uneven cash flows or annuity payments: Description Debbie has been donating 10% of her salary at the end of every year to charity for the last three years. Her salary increased by 15% every year in the last three…
- If a production machine costs $18,000, and we are able to set up the following payment arrangements with the bank: Number of payments = 4 (one at the end of each year) Interest Rate = 5% Amount of each annual payment = $5,000 Questions: What is the present value of the stream of cash flows (the series of payments)? Will we be provided with enough purchasing power at the present time to be able topurchase the machine?Home Security Systems is analyzing the purchase of manufacturing equipment that will cost $56,000. The annual cash inflows for the next three years will be: Year 1 2 3 Cash Flow $ 28,000 26,000 21,000 Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the financial calculator method. a. Determine the internal rate of return. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Internal rate of return %The Purple Lion Beverage Company expects the following cash flows from its manufacturing plant in Palau over the next four years: Annual Cash Flows Year 1 Year 2 Year 3 Year 4 $100,000 $20,000 $330,000 $450,000 The Cro of the company believes that an appropriate annual interest rate on this investment is 4%. What is the present value of this uneven cash flow stream, rounded to the nearest whole dollar? O $1,650,000 O 2,000,000 O $792,676 O $450,000
- Home Security Systems is analyzing the purchase of manufacturing equipment that will cost $36,000. The annual cash inflows for the next three years will be: Year 1 2 3 Cash Flow $ 18,000 16,000 11,000 Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the financial calculator method. a. Determine the internal rate of return. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Internal rate of return % b. With a cost of capital of 12 percent, should the equipment be purchased? O Yes O NoThe Purple Lion Beverage Company expects the following cash flows from its manufacturing plant in Palau over the next five years: Year 1 $250,000 Annual Cash Flows Year 2 $20,000 Year 3 Year 4 $180,000 $450,000 Year 5 $550,000 The CFO of the company believes that an appropriate annual interest rate on this investment is 4%. What is the present value of this uneven cash flow stream, rounded to the nearest whole dollar?Salalah Foods is getting ready to produce a new line of products by investing 185000 OMR. The investment will result in additional cash flows of 52500 OMR , 81250, and 120000 over the next three years. What is the payback period for this project? Select one: a. 1.84 years b. 2.62 years c. None of these d. 1.53 years e. 2.42 years The market which deals with long term financial assets Select one: a. All the options b. Primary Market c. Secondary Market d. Capital Market
- A company estimates that it will need $375,000 in 11 years to replace an important machine. If it establishes a sinking fund, by making fixed monthly payments into an account paying 8.4% compounded monthly, a) how much should each payment be? A b) How much of the $375,000 that is in the account in the end will be interest?A new machine is expected to produce the following after-tax cash inflows over a period of 5 years: After-tax cash inflows Year Per Year Cumulative 1 16,000 16,000 2 12,000 28,000 3 20,000 48,000 4 8,000 56,000 5 6,000 62,000 1.If the machine will cost P40,000, its payback period is ? 2.Ace Hardware is adding a new product line that will require an investment of $1,512,000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $310,000 the first year, $280,000 the second year, and $260,000 each year thereafter for eight years. Compute the payback period. Round to one decimal place Net Cash Outflows Net Cash Inflows Year Amount Invested Annual Accumulated 0 1 2 3 4 5 Now that you understand how to fill in the payback schedule, the rest has been done for you. Review the table and determine between what years the payback will occur. The payback will occur after years, but before years. Now let's calculate the amount needed to complete recovery after year 5. Amount recovered Amount needed to complete Investment - at…