ujeci isteu in ne following table, . use the Pl to determine which projects the company should What is the PI of project A? I (Round to two decimal places.) Data Table - X (Click on the following icon D in order to copy its contents into a spreadsheet) Cash Flow Projoct A $1,900,000 $150,000 $350,000 $550,000 $750,000 $950,000 Projoct B -$2,300,000 $1,150,000 $950,000 $750,000 $550,000 $350,000 18% Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Discount rate 4%

ujeci isteu in ne following table, . use the Pl to determine which projects the company should What is the PI of project A? I (Round to two decimal places.) Data Table - X (Click on the following icon D in order to copy its contents into a spreadsheet) Cash Flow Projoct A $1,900,000 $150,000 $350,000 $550,000 $750,000 $950,000 Projoct B -$2,300,000 $1,150,000 $950,000 $750,000 $550,000 $350,000 18% Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Discount rate 4%

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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Profitability index. Given the discount rate and the future cash flow of each project listed in the following table, use the PI to determine which projects the company should accept. What is the PI of project B?(Round to two decimal places.) Cash Flow Project A Project B Year 0 −$1,800,000 −$2,400,000 Year 1 $500,000 $1,200,000 Year 2 $600,000 $1,100,000 Year 3 $700,000 $1,000,000 Year 4 $800,000 $900,000 Year 5 $900,000 $800,000 Discount rate 5% 17%
NPV profile of a project. Given the following cash flow of Project L-2, draw the NPV profile. Hint. Be sure to use a discount rate of zero for one intercept (y-axis) and solve for the IRR for the other intercept ( x-axis). (Click on the following icon ◻ in order to copy its contents into a spreadsheet.) Year 0=-$300,000 Year 1=$50,000 Year 2=$79,000 Year 3=$118,000 Year 4=$130,000 What is the NPV of Project L-2 where zero is the discount rate? $ (Round to the nearest dollar.) What is the IRR of Project L-2? % (Round to two decimal places.) Which of the graphs below best fits the NPV profile of the project? Click on the magnifying glass icon to see an enlarged version of each graph. (Select the best response.) B. D.
NPV profile of a project. Given the following cash flow of Project L-2, draw the NPV profile. Hint: Be sure to use a discount rate of zero for one intercept (y-axis) and solve for the IRR for the other intercept (x-axis). (Click on the following icon in order to copy its contents into a spreadsheet.) Year 0 = - $300,000 Year 1= $42,000 Year 2 = $77,000 Year 3 = $111,000 Year 4 = $140,000 What is the NPV of Project L-2 where zero is the discount rate? $ 70000.00 (Round to the nearest dollar.) What is the IRR of Project L-2? % (Round to two decimal places.)
Profitability index. Given the discount rate and the future cash flow of each project listed in the following table, , use the PI to determine which projects the company should accept. ..... What is the Pl of project A? (Round to two decimal places.)
Below are four cases that you will have to solve using Excel spreadsheets. 2nd case The COMPETIDORA SA company has the possibility of investing in three different projects . The projections show us the following information on which a decision must be made: PROJECT X Y Initial Z$310,000 It is requested: investment $180,000 $250,000 Year 1 cash flows $50,000 $80,000 $150,000 1. Determine the internal rate of return. 2. Determine the present value. Year 2 cash flows 3. Determine the recovery period. 4. Define which is the most viable project. $70,000 $80,000 $120,000 The discount rate for the project will be 9% and the investors propose a MARR of 22%. Year 3 cash flows $80,000 $80,000 $100,000 Year 4 cash flows $100,000 $80,000
Consider the cash flow of the two projects depicted in Table 3. If WiseGuy Inc. uses payback period rule to choose projects, which of the projects (Project A or Project B) will rank highest? TABLE 3 Project A Project B Time 0. -11,000. -10,000 Time 1. 3,000. 4,000 Time 2. 8,000. 3,000 Time 3. 3,000. 10,000 A) Project A B) Project B C) Project A and Project B have the same ranking. D) It cannot calculate a payback period without a discount rate. 7 Consider the cash flow of the two projects depicted in Table 3. If WiseGuy Inc. uses IRR rule to choose projects, which of the projects (Project A or Project B) will rank highest? A) Project A B) Project B C) Project A and Project B have the same ranking. D) It cannot calculate a payback period without a discount rate.
**Please solve using Excel and show formulas.** Consider the following projects: Project Cash Flows A -4 5 2.3 0 0 1,000 B -5,600 2,800 2,800 5,800 2,800 2,800 C -7,000 2,800 2,500 0 2,800 2,800 Question: What is the payback period for Project C? Multiple Choice 3.4 3.9 3.2 3.6 3.8
Consider projects A and B with the following cash flows: Ce $32 57 $16 +$16 + 32 +$ 16 32 a-1. What is the NPV of each project if the discount rate is 12%? (Do not round intermediate calculations. Round your answers to 2 decimal places.) 6-2. Which project has the higher NPV? b-1. What is the profitability Index of each project? (Do not round intermediate calculations. Round your answers to 2 decimal places.) b-2. Which project has the higher profitablity index? c. Which project is most attractive to a firm that can ralse an unlimited amount of funds to pay for its investment projects? d. Which project is most attractive to a firm that is limited in the funds it can ralse? ok nt mces Project A Project B a-1. NPV of ench project if the discount rate is 12% a-2. Which project has the higher NPV? b-1. Profitability index of each projoct b-2. Which project has the higher protitability index? Which project is most attractive to a firm that can raise an unlimited amount of funds to pay for…
A project has the following cash flows set out below. What is the profitability index of this project if the relevant discount rate is 2 percent? Enter your final answer to two decimal places. Year Cash flow 0 -1,745 1 537 2 2,066 3 3,912
(Click on the following icon in order to copy its contents into a spreadsheet.) Year 1 Year 2 Year 3 Year 0 -$50 -$101 $26 $20 $22 $22 $39 $49 Project A B Year 4 $16 $62 You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): a. What are the IRRs of the two projects? b. If your discount rate is 5.2%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently?
Determine the future value of the following single amounts. Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) 1. 2. 3 4. Invested Amount 15,000 20,000 30,000 50,000 $ $ $ U $ i = 6% 8% 12% 4% n = 12 10 20 12 Future Value
ne Internal rate of return For the project shown in the following table, , calculate the internal rate of return (IRR). Then indicate, for the project, the maximum cost of capital that the firm could have and still find the IRR acceptable. The project's IRR is %. (Round to two decimal places.) ts eText dia Librai Calculat Resaurce Emter vour amswer in the amswer box and then click Check Answer. ic Studiy Check Answer part memaiming Clear All Tiration Tiools > Ouestion 10 (0/1) Ouestion 11 (0/1). Question 12 (0/1) Question 9 (0/1) 5/1 Type Ihere to search insert

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