The writer is very fast, professional and responded to the review request fast also. Thank you.
Presentation/PPT
27/08/2022
1. An investment project has annual cash inflows of $4,300, $4,000, $5,200, and $4,400, and a discount rate of 13 percent.
What is the discounted payback period for these cash flows if the initial cost is $5,800? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Discounted payback period years
What is the discounted payback period for these cash flows if the initial cost is $7,900? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Discounted payback period years
What is the discounted payback period for these cash flows if the initial cost is $10,900? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Discounted payback period years
2. Stone Sour, Inc., has a project with the following cash flows:
Year Cash Flow
0 –$ 27,900
1 11,900
2 14,900
3 10,900
________________________________________
The required return is 18 percent. What is the IRR for this project? (Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16))
IRR %
3. Bill plans to open a self-serve grooming center in a storefront. The grooming equipment will cost $480,000, to be paid immediately. Bill expects aftertax cash inflows of $103,000 annually for eight years, after which he plans to scrap the equipment and retire to the beaches of Nevis. The first cash inflow occurs at the end of the first year. Assume the required return is 13 percent.
What is the project’s PI? (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161))
PI
3. Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 17 percent.
Year Deepwater Fishing New Submarine Ride
0 −$ 1,000,000 −$ 1,950,000
1 420,000 1,000,000
2 550,000 850,000
3 470,000 850,000
________________________________________
a-1. Compute the IRR for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
IRR
Deepwater Fishing %
Submarine Ride %
________________________________________
b-1. Calculate the incremental IRR for the cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))
Incremental IRR %
Answer: 17.15
c-1. Compute the NPV for both projects.(Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
NPV
Deepwater Fishing $
Submarine Ride $
________________________________________
4. The Robb Computer Corporation is trying to choose between the following two mutually exclusive design projects:
Year Cash Flow (I) Cash Flow (II)
0 –$ 54,000 –$ 19,000
1 41,000 10,200
2 41,000 10,200
3 41,000 10,200
________________________________________
a-1. If the required return is 11 percent, what is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161))
Profitability Index
Project I
Project II
________________________________________
b-1. What is the NPV for each project? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
NPV
Project I $
Project II $
________________________________________
5. Mario Brothers, a game manufacturer, has a new idea for an adventure game. It can market the game either as a traditional board game or as an interactive DVD, but not both. Consider the following cash flows of the two mutually exclusive projects for Mario Brothers. Assume the discount rate for Mario Brothers is 10 percent.
Year Board Game DVD
0 –$ 1,600 –$ 3,500
1 770 2,150
2 1,350 1,650
3 290 1,200
________________________________________
a. What is the payback period for each project? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))
Payback period
Board game
DVD
________________________________________
b. What is the NPV for each project? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))
NPV
Board game $
DVD $
________________________________________
c. What is the IRR for each project? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))
IRR
Board game %
DVD %
________________________________________
d. What is the incremental IRR? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Incremental IRR %
6. Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the discount rate for Tokyo Rubber Company is 8 percent.
Year Dry Prepreg Solvent Prepreg
0 –$ 1,840,000 –$ 820,000
1 1,114,000 445,000
2 928,000 740,000
3 764,000 418,000
________________________________________
a. What is the payback period for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
Payback period
Dry Prepeg years
Solvent Prepeg years
________________________________________
b. What is the NPV for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
NPV
Dry Prepeg $
Solvent Prepeg $
_______________________________________
c. What is the IRR for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
IRR
Dry Prepeg %
Solvent Prepeg %
________________________________________
d. Calculate the incremental IRR for the cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))
Incremental IRR %
7. Consider two mutually exclusive new product launch projects that Nagano Golf is considering. Assume the discount rate for Nagano Golf is 13 percent. (Do not round intermediate calculations. Round your “PI” answers to 3 decimal places (e.g., 32.161) and other answers to 2 decimal places. (e.g., 32.16))
Project A: Nagano NP-30.
Professional clubs that will take an initial investment of $640,000 at time 0.
Next five years (Years 1–5) of sales will generate a consistent cash flow of $275,000 per year.
Introduction of new product at Year 6 will terminate further cash flows from this project.
Project B: Nagano NX-20.
High-end amateur clubs that will take an initial investment of $650,000 at Time 0.
Cash flow at Year 1 is $190,000. In each subsequent year cash flow will grow at 10 percent per year.
Introduction of new product at Year 6 will terminate further cash flows from this project.
Year NP-30 NX-20
0 –$ 640,000 –$ 650,000
1 275,000 190,000
2 275,000 209,000
3 275,000 229,900
4 275,000 252,890
5 275,000 278,179
________________________________________
Complete the following table:
NX-30 NX-20
Payback
years
years
IRR
%
%
PI
NPV $
$
________________________________________
The writer is very fast, professional and responded to the review request fast also. Thank you.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more