Current Attempt in ProgressThe Management of Carla Vista Manufacturing Company is evaluating two forklift systems to use in its plant that produces the towersfor a windmill power farm. The costs and the cash flows from these systems are shown below. The company uses a 10 percent discountrate for all projects.Year 0DYear 1Year 2Year 3Otis Forklifts$-3,138,450$974,225$1,362,886$2,112,497Craigmore Forklifts$-4,128,410 $876,236 $1,766,225$2,853,110NPVOtis forklift$460,711Craigmore Forklifts$271,442Compute the IRR for each of the two systems. (Round intermediate calculation to O decimal places, e.g. 1,525 and final answers to 2 decimalplaces, e.g. 15.10%.)Otis forkliftCraigmore ForkliftsIRR%%Is the investment decision different from the one determined by NPV?The investment decision iseTextbook and Mediafrom the one determined by NPV.Save for LaterUsing multiple attempts will impact your score.20% score reduction after attempt 2Q SearchAttempts: 0 of 3 usedSubmit Answer

Step 1: The calculation of the IRR ABC1YearOtis forkliftCraigmore forklift20 $ -3,138,450 $…

Answered: Current Attempt in Progress The…

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter9: Capital Budgeting Techniques

Section: Chapter Questions

Problem 12PROB

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ic Yo NS io cer ist bun ngs nnée Current Attempt in Progress Blossom Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $905,000, and project B's cost is $1,247,300. Cash flows from both projects are given in the following table. Year 1 2 3 4 Project A $86,212 313,562 427,594 285,552 Project B $586,212 413,277 231,199 What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.) Discounted payback period of project A Discounted payback period of project B will he accepted with a discount rate of 8 percent? átv zoom
MAIN PROJECT lums University is considering investing in an online book ordering and information service, which will be managed by 2 employees. The following estimates relate to the costs of starting the service and the subsequent revenues from it. The initial investment needed to start the service, including the installation of additional phone lines and computer equipment, will be $1,000,000. These investments are expected to have a life of 4 years with 0 salvage value.The investments will be depreciated straight line over the four-year life.The revenues in the first year are expected to be $1500,000, growing 20% in year 2, and 10% in the two years following.The salaries and other benefits for the employees are estimated to be $150,000 in year 1, and grow 10% a year for the following three years.The cost of the books is assumed to be “0.60” of the revenues in each of the four years.The non-cash working capital, which includes the inventory of books needed for the service and the…
MAIN PROJECT Iqra University is considering investing in an online book ordering and information service, which will be managed by 2 employees. The following estimates relate to the costs of starting the service and the subsequent revenues from it. The initial investment needed to start the service, including the installation of additional phone lines and computer equipment, will be $1,000,000. These investments are expected to have a life of 4 years with 0 salvage value. The investments will be depreciated straight line over the four-year life. The revenues in the first year are expected to be $1500,000, growing 20% in year 2, and 10% in the two years following. The salaries and other benefits for the employees are estimated to be $150,000 in year 1, and grow 10% a year for the following three years. The cost of the books is assumed to be “0.60” of the revenues in each of the four years. The non-cash working capital, which includes the inventory of books needed for the service and…
MAIN PROJECT Iqra University is considering investing in an online book ordering and information service, which will be managed by 2 employees. The following estimates relate to the costs of starting the service and the subsequent revenues from it. The initial investment needed to start the service, including the installation of additional phone lines and computer equipment, will be $1,000,000. These investments are expected to have a life of 4 years with 0 salvage value.The investments will be depreciated straight line over the four-year life.The revenues in the first year are expected to be $1500,000, growing 20% in year 2, and 10% in the two years following.The salaries and other benefits for the employees are estimated to be $150,000 in year 1, and grow 10% a year for the following three years.The cost of the books is assumed to be “0.60” of the revenues in each of the four years.The non-cash working capital, which includes the inventory of books needed for the service and the…
TOPIC: ANNUITIES INSTRUCTION: SHOW COMPLETE SOLUTION WITH CORRESPONDING CASH FLOW DIAGRAM AND BOX THE FINAL ANSWER Hydroklean, an environmental soil cleaning company, borrowed P3.5M to finance start-up costs for a site reclamation project. How much must the company receive every six months in revenue to earn a rate of return of 15% compounded semiannually for the 5-year project period?
RLC Manufacturing is planning to purchase a cutting equipment. Information are as follows: Equipment 1 Equipment 2 First Cost P 12,000 P 18,000 Salvage Value P 600 P 2,000 Annual Operation P 3,200 P 2,500 Annual Maintenance P 1,200 P 1,000 Taxes & Insurance 3% 3% Life, years 10 15 Money is worth at least 16%. Which equipment should be selected? Use: a. Rate of Return Method Rate of Return Method Annual Cost Method NOTE: Show cashflow diagram.
MAIN PROJECT Szabist University is considering investing in an online book ordering and information service, which will be managed by 2 employees. The following estimates relate to the costs of starting the service and the subsequent revenues from it. The initial investment needed to start the service, including the installation of additional phone lines and computer equipment, will be $1,000,000. These investments are expected to have a life of 4 years with 0 salvage value.The investments will be depreciated straight line over the four-year life.The revenues in the first year are expected to be $1500,000, growing 20% in year 2, and 10% in the two years following.The salaries and other benefits for the employees are estimated to be $150,000 in year 1, and grow 10% a year for the following three years.The cost of the books is assumed to be “0.60” of the revenues in each of the four years.The non-cash working capital, which includes the inventory of books needed for the service and the…
Current Attempt in Progress 4. Management of Ivanhoe Measures, Inc., is evaluating two independent projects. The company uses a 13.00 percent discount rate for such projects. The costs and cash flows for the projects are shown in the following table. Year Project 1 Project 2 0 -$9,242,840 -$12,271,200 1 3,483,400 2,301,330 2 1,808,290 3,908,800 3 1,297,600 3,003,090 4 1,168,900 4,434,310 5 1,271,380 4,140,780 6 1,693,940 7 1,479,290 What are their NPVS? (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to O decimal places, e.g. 1,525.) The NPV of Project 1 is $ , and the NPV of Project 2 is $ eTextbook and Media Save for Later Using multiple attempts will impact your score. 20% score reduction after attempt 2 Search Attempts: 0 of 3 used Submit Answer
Alpha Bridge Project SUMMARY OF BRIDGE REPAIR COSTS Year Activity Cost GH¢ 2005 Inspection and top chord repairs 44,800 2007 Inspection and erosion protection 19,800 2009 Inspection 1,800 2011 Inspection and misc. steel repairs 31,800 2013 Inspection 1,800 2015 Inspection 1,800 2017 Inspection and repair abutments 65,000 2019 Inspection 1,800 Calculate the present value of the costs for the above project cash flow with a discounting rate of 5%
MAIN PROJECT Texas University is considering investing in an online book ordering and information service, which will be managed by 2 employees. The following estimates relate to the costs of starting the service and the subsequent revenues from it. The initial investment needed to start the service, including the installation of additional phone lines and computer equipment, will be $1,000,000. These investments are expected to have a life of 4 years with 0 salvage value.The investments will be depreciated straight line over the four-year life.The revenues in the first year are expected to be $1500,000, growing 20% in year 2, and 10% in the two years following.The salaries and other benefits for the employees are estimated to be $150,000 in year 1, and grow 10% a year for the following three years.The cost of the books is assumed to be “0.60” of the revenues in each of the four years.The non-cash working capital, which includes the inventory of books needed for the service and the…
Required information (The following information applies to the questions displayed below] A local farming company is considering an investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 14%. The project would provide net operating Income in each of five years as follows: Sales Variable expenses $2,867,000 1,125,000 Contribution margin 1,742,000 Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation $706,000 571,000 Total fixed expenses Net operating income 1,277,000 $ 465,000 Click here to view Exhibit 148-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using table. What is the present value of the project's annual net cash inflows? (Round your final answer to the nearest whole dollar amount.) Present value
Jim Jones Sleepaway Camps, Inc. is looking for some payback period analysis for a new project in Janestown, Indiana. Suppose that the cost of acquiring the new camp, buildings, cabins, etc. and setting up trails and activities has an initial cost of $1.3M dollars but will generate the following cash-flows for the next four years: Year 1 $450,000 Year 2 $610,000 Year 3 $464,000 Year 4 $575,000 What is the payback period for this project

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