ementsWhat is the total Wealth Accumulation of the following investment assuming theavailable after tax reinvestment rate is 5%?IRR 10.70%O $4,690,000O $4,821,078O $4,848,844$4,905.989n0 $1 S2$3 $AS5 $Investment$(3,000,000)240,000250,000260,000266,0003,674,000

Total Wealth Accumulated refers to the total amount accumulated after compounding at a specified…

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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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1. How much is the net share in the profit or loss of the associate (investment income) in 2021? P480,000 P825,000 P420,000 P135,000 2. How much is the carrying amount of the investment as of December 31, 2021? P7,815,000 P8,025,000 P7,680,000 P7,125,000
After-Tax Cash Flows Below is a list of aspects of various capital expenditure proposals that the capital budgeting team of Anchor, Inc., has incorporated into its net present value analyses during the past year. Unless otherwise noted, the items listed are unrelated to each other. All situations assume a 40% income tax rate and an 11% minimum desired rate of return. 1. Pre-tax savings of $4,000 in cash expenses will occur in each of the next three years. 2. A machine is purchased now for $37,000 cash. 3. A long-haul tractor costing $27,000 will be depreciated $9,000, $12,000, $4,050, and $1,950, respectively, on the tax return over four years. 4. Equipment costing $200,000 will be depreciated over five years on the tax return in the following amounts: $25,000; $50,000; $50,000; $50,000; and $25,000. 5. Pre-tax savings of $8,800 in cash expenses will occur in each of the next six years. 6. Pre-tax savings of $7,000 in cash expenses will occur in the first, third, and fifth years from…
What is the present value of the following cash flow stream at a rate of 12.00%? Years: 0 1 2 3 4 CFs: $0 $75 $225 $0 $300 Select one: a. $511.28 b. $402.03 c. $546.24 d. $441.36 e. $436.99
Given 1275,000, S40,000 N = 5 i 16% Calculate the Capital Recovery amount a. none of the above O b. 55,000 O c. 78,171 O d. 93,509
QUESTION 1 Given the following information Please calculate the Free Cash Flow to Equity EBIT Net Income Tax rate Depreciation Capital expenditure 2207.9 1513.5 21.80% 1807.1 954.6 Change in non-cash Working Capital -2176.3 Change in long term debt Interest Expense Liabilities Total Long Term debt Total Assets 4755 5470 3902 5628 927.6 395.3 24511.8 13220.6 26168.2
What is the present value of the following cash flow stream at a rate of 10.0%? Years: CFS: O a. $11,855.25 O b. $10,755.00 O c. $13,143.15 O d. $9,722.73 Oe. $8.907.02 0 $750 1 $2,450 2 $3,175 3 $4,400
How much is the consolidated profit in 2021?A. 301,000B. 336,000C. 310,000D. 320,000
The table below shows the profit after tax and the book value of investment for threeprojects A, B, and CProjectAProjectBProjectCProjectAProjectB ProjectCYear 1 400,000 300,000 250,000 1,500,000 1,200,000 1,000,000Year 2 450,000 450,000 300,000 1,350,000 1,080,000 900,000Year 3 500,000 500,000 400,000 1,215,000 972,000 810,000Year 4 450,000 550,000 500,000 1,093,500 874,800 729,000Year 5 - 500,000 300,000 - 787,320 656,100Year 6 - - 250,000 - - 590,000Required: b. State and briefly explain FIVE advantages and disadvantages of payback periodin project appraisa
What is the Net Present Value of the following cash flow stream? Year Cash Flow 0 -$1,977 1 $421 2 $889 3 $517 4 $939 Assume an interest rate of 3%
Assuming the reinvestment rate is 5%, in order for the Annual Compound Growth Rate of Capital to equal the Internal Rate of Return, which of the following statements is correct? IRR= n 0 1 2 3 4 $ 5 $ es is is is i $ $ $ $ Investment $ (1,000,000) 80,000 83,333 86,667 88,667 1,224,667 10.70% The after tax reinvestment rate would have to be higher than the IRR The after tax reinvestment rate would have to be lower than the IRR There is not enough information to answer this question The after tax reinvestment rate would have to be equal to the IRR
If EBIT is 15,00,000, interest is 250000,corporare tax is 40 percent degree of financial leverage is a. 1:11 b. 1.20 c. 1.31 d. 1.41
Determine the ERR (External rate of return) of the cash flows if external rate (e) is given as %19. Year Cash Flow 0 -3000 1 2000 2 4000 3 -1000 4 3000 5 4000 6 -5000 7 9000 Select one: a. 0.2988 b. 0.2638 c. 0.2565 d. 0.3073 e. 0.2783 f. 0.3491

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What is the total Wealth Accumulation of the following available after tax reinvestment rate is 5%? IRR 10.70% O $4.690.000 $4,821.078 $4,848,844 $4,905.989 Investment $ (3,000,000) 240,000 250,000 260,000 n 0$ 1 $ 2 $ 3 $ AS 266,000 5 $ 3,674,000