Problem 9-3 Calculating Payback [LO2]Kara, Incorporated, imposes a payback cutoff of three years for its internationalinvestment projects.Year Cash Flow (A)012V34-$ 53,00019,50021,00017,5004,500Project AProject BWhat is the payback period for both projects? (Do not round intermediate calculationsand round your answers to 2 decimal places, e.g., 32.16.)Cash Flow (B)-$ 63,00011,50014,50019,000223,000Project BO Project AyearsyearsWhich project should the company accept?

Kara, Incorporated, imposes a payback cutoff of three years for its international investment projects. Year Cash Flow (A) -$ 53,000 19,500 21,000 17,500 4,500 01234 What is the payback period for both projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Project A Project B Cash Flow (B) -$ 63,000 11,500 14,500 19,000 223,000 Project B O Project A years years Which project should the company accept?

Kara, Incorporated, imposes a payback cutoff of three years for its international investment projects. Year Cash Flow (A) -$ 53,000 19,500 21,000 17,500 4,500 01234 What is the payback period for both projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Project A Project B Cash Flow (B) -$ 63,000 11,500 14,500 19,000 223,000 Project B O Project A years years Which project should the company accept?

Fundamentals of Financial Management (MindTap Course List)

14th Edition

ISBN:9781285867977

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter12: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 17P: EQUIVALENT ANNUAL ANNUITY A firm has two mutually exclusive investment projects to evaluate; both...

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Year 0123 Cash Flow -$ 27,000 11,000 14,000 10,000 The appropriate discount rate is 16 percent. What is the IRR for this project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) IRR % Should the firm accept the project? O Reject O Accept
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ces A firm evaluates all of its projects by applying the IRR rule. Year Cash Flow 161,000 0 55,000 1 84,000 2 68,000 3 What is the project's IRR? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Internal rate of return % If the required return is 12 percent, should the firm accept the project?
S A firm evaluates all of its projects by applying the IRR rule. Year 0 1 2 3 Cash Flow -$ 41,000 20,000 23,000 14,000 a. What is the project's IRR? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. If the required return is 14 percent, should the firm accept the project? a. Internal rate of return b. Project acceptance %
Exercise 14-14 (Algo) Comparison of Projects Using Net Present Value [LO14-2] Labeau Products, Limited, of Perth, Australia, has $21,000 to invest in one of the following two projects: Project Y $ 21,000 Investment required Annual cash inflows Single cash inflow at the end of 6 years Life of the project The company's discount rate is 18%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value of Project X. 2. Compute the net present value of Project Y. 3. Which project should the company accept? Project X Required 1 Required 2 Required 3 $ 21,000 $ 8,000 Complete this question by entering your answers in the tabs below. $ 50,000 6 years
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$ -$ 0 1235 4 NO a- Whichever project you choose, if any, you require a return of 14 percent on your investment. Project A Project B 357,000 38,000 58,000 58,000 433,000 a-1. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) 46,500 23,300 21,300 18,800 13,900 Project A Project B Payback period If you apply the payback criterion, which investment will you choose? 2. O Project A O Project B years years b- What is the discounted payback period for each project? (Do not round intermediate 1. calculations and round your answers to 2 decimal places, e.g., 32.16.) Discounted payback period years years
24 es Year 01234 a. What is the IRR of this project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.. 32.16.) IRR Cash Flows $9,800 -4,300 -3,300 -2,500 -2,300 b. If the appropriate discount rate is 10 percent, should you accept this project? O Reject O Accept c. If the appropriate discount rate is 20 percent, should you accept this project? O Reject O Accept d-1. What is the NPV of the project if the appropriate discount rate is 10 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d-2. What is the NPV of the project if the appropriate discount rate is 20 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d-1. NPV d-2. NPV
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Problem 8-6 Profitability Index (LO3) The following are the cash flows of two projects: Project B $ (350) 250 250 250 Year 0 1 2 434 Project A $ (350) 180 180 180 180 If the opportunity cost of capital is 11%, what is the profitability index for each project? Note: Do not round intermediate calculations. Round your answers to 4 decimal places. Answer is complete but not entirely correct. Profitability Index Project A B 1.5955 1.7455