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- You may purchase 100 shares of Mun Tee ltd on a 55 percent margin when the shares are selling at K20 each. The Lusaka stock exchange broke charges you 10 percent annual interest,and commission are 3 percent of total stock value on both the purchase and the sale. If a year later you receive a K0.50 per share dividend and sell the stock for K27. What's your rate of return on investment?Economics If you invest $10,000 now into a project that will yield net revenues of $1,327 at the end of each year for 12 years, what is the internal rate of return (IRR) of your investment? Oa. 8% Ob. 18%(c) If A and B are mutually exclusive projects, which project would you select based on the rate of return on incremental investment at MARR = 10%? The rate of return on the incremental investment is %. (Round to one decimal place.) Which project would you select based on the rate of return on incremental investment at MARR = 10%? Choose the correct answer below. Project A O Project B 1: More Info FOT23 n 0 1 Net Cash Flow Project A - $145,000 35,000 35,000 140,000 Project B - $130,000 25,000 25,000 150,000
- The following cash flows result from a potential construction project for your company: 1. Receipts of $565,000 at the start of the contract and $1,200,000 at the end of the fourth year 2. Expenditures at the end of the first year of $400,000 and at the end of the second year of $900,000 3. A net cash flow of $0 at the end of the third year. A Using an appropriate rate of return method (Approximate ERR), for a MARR of 20%, should your company accept this project (Perform all calculations using 5 significant figures and round your answer to one decimal place. Also remember that text answers are case-sensitive):? Answers entered using text are case sensitive! What is the approximate ERR for this project? Number 5 Should your company undertake this project? (Enter either 'Yes' or 'No'): 198 团A pharmaceutical company has spent $500 million to date working on a blood pressure treatment. It has to decide whether to spend another $500 million today to get final approval from the FDA in two years. Once approved, expected profits will be $50 million per year for the foreseeable future. The firm’s cost of capital is 5%. Should the firm proceed? (Hint: use the perpetuity formula used to value projects found in the readings to find the value of the profit stream that starts in two years, and then discount that.) 2. Suppose some doctors do not see any advantage of using the drug over what they currently prescribe for patients and the profit stream is only $25 million per year. Should the firm proceed? 3. Going back to the original information, suppose there is a delay of a year in getting FDA approval. Should the firm proceed? 4. Going back to the original information, suppose the firm’s’ cost of capital is 10%. Should the firm proceed?Question: Your client is asking you to design a Flux Capacitor. The Flux Capacitor is expected to cost $5,200 to build. If operations and maintenance costs are anticipated to be 15% of the build costs the first year of operation and operation and maintenance costs will increase by 6% each year after, how much will your client have invested in the Flux Capacitor after 5 years? Notes from instructor: I have had a few questions about the Econ. Assignment. I want to clarify that the 6% interest rate does not accumulate over 4 years and it is not added to the 15%. If something increases by the interest it is (1+i) each year. I recommend finding the cost of each year and then summing them up. The equation is not direct from the FE manual so this is going to best your best course of action for now.
- A project has an initial cost of $65,000, expected net cash inflows of $11,000 per year for 12 years, and a cost of capital of 11%. What is the project's MIRR? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to two decimal places.A labor saving device system save $2,000 per year for five (5) years. It can be installed at a cost of $8,000. The rate of return on this planned investment is most nearly: a. = 12.36% b. = 9.36% c. 10% d. i = 8%What is the i*% for the given project? (Round answers to the third number after the decimal) Cash Flow 0 ($7,000) 1 $3,600 2 $2,900 3 $0 4 $1,300 5 $500
- The following cash flows result from a potential construction project for your company: 1. Receipts of $505,000 at the start of the contract and $1,200,000 at the end of the fourth year 2. Expenditures at the end of the first year of $400,000 and at the end of the second year of $900,000 3. A net cash flow of $0 at the end of the third year. Using an appropriate rate of return method (Approximate ERR), for a MARR of 20%, should your company accept this project (Perform all calculations using 5 significant figures and round your answer to one decimal place. Also remember that text answers are case-sensitive):? Answers entered using text are case sensitive! What is the approximate ERR for this project? Number Should your company undertake this project? (Enter either 'Yes' or 'No'): %A company is considering purchasing equipment costing $70,000. The equipment is expected to reduce costs from year 1 to 3 by $7,000, year 4 to 8 by $10,000, and in year 9 by $6,000. In year 9, the equipment can be sold at a salvage value of $15,000. Calculate the internal rate of return (IRR) for this proposal. ..... The internal rate of return is %. %6. (Round to the nearest tenth as needed.)Give typing answer with explanation and conclusion A small company purchased now for $120,000 will lose $300 each year for the first four years. An additional $600 in the company in the fourth year will result in a profit of $9500 each year from the fifth through the twelfth year. At the end of 12 years, the company can be sold for $135,000. a) Draw the cash flow diagram b) Determine the IRR for this project. c) Calculate the FW if MARR is 5%. d) Calculate the ERR when ε = 7%.