Q5. Consider the investment projects given in the following table:Net Cash FlownProject AProject BProject C- $100- S150- $101305041025050-55835025245021.11%Assume that MARR = 12% in the following questions:IRR23.24%20%, 40%, 50%Identify simple and non-simple projects.Identify pure and mixed investments.Determine the IRR for Project C.(Hint: You can use trial-error method followed by linear interpolation.)Which project(s) is(are) acceptable?b)c)d)

Simple projects are where the cash outflow is done at an initial stage and there is only one sign…

Q5. Consider the investment projects given in the following table: Net Cash Flow Project A Project B Project C - $100 - S150 - $10 1 30 50 410 2 50 50 -558 3 50 252 50 IRR 23.24% 21.11% 20%, 40%, 50% Assume that MARR = 12% in the following questions: Identify simple and non-simple projects. Identify pure and mixed investments. Determine the IRR for Project C. (Hint: You can use trial-error method followed by linear interpolation.)

Q5. Consider the investment projects given in the following table: Net Cash Flow Project A Project B Project C - $100 - S150 - $10 1 30 50 410 2 50 50 -558 3 50 252 50 IRR 23.24% 21.11% 20%, 40%, 50% Assume that MARR = 12% in the following questions: Identify simple and non-simple projects. Identify pure and mixed investments. Determine the IRR for Project C. (Hint: You can use trial-error method followed by linear interpolation.)

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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Consider the following projects: Cash Flows ($) Co Project D E -11, 100 -21, 100 C₁ 22, 200 34,500 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 11%. a. Calculate the profitability index for each project. b-1. Calculate the profitability-index using the incremental cash flows. b-2. Which project should you choose?
Consider the following projects: Cash Flows ($) Project D E CO00 C101 -11,700 23,400 -21,700 37,975 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 12%. a. Calculate the profitability index for each project. b-1. Calculate the profitability-index using the incremental cash flows. b-2. Which project should you choose?
11. IRR rule (S5.3) Consider the following two mutually exclusive projects: Cash flows ($) Project A B Co -50 -50 C₁ +60 0 C₂ +60 0 0 +140 Page 142 a. Calculate the NPV of each project for discount rates of 0%, 10%, and 20%. Plot these on a graph with NPV on the vertical axis and discount rate on the horizontal axis. b. What is the approximate IRR for each project? c. In what circumstances should the company accept project A? d. Calculate the NPV of the incremental investment (B – A) for discount rates of 0%, 10%, and 20%. Plot these on your graph. Show that the circumstances in which you would accept A are also those in which the IRR on the incremental investment is less than the opportunity cost of capital.
Consider cash flows for the following investment projects (MARR Q2. Suppose that projects are mutually exclusive. Which project would you select based on AE criterion? 15 %). Project A Project B -3500 ProjectC -3000 -4000 1 1400 1100 1500 2. 1650 1000 1500 1300 1000 1800 4 750 1000 1800
onsider the following cash flows: C0=-$42 C1=+$38 C2=+$38 C3=+$38 C4=-$76 a. Which two of the following rates are the IRRs of this project?
7.16)Consider the investment projects given in Table P7.16. Assume that MARR = 12% in the following questions. (a) Compute i* for each investment. If the problem has more than one i*, identify all of them. (b) Compute IRR(true) for each project. (c) Compute the MIRR at MARR = 12%. (d) Determine the acceptability of each investment. TABLE P7.16 Net Cash Flow Project 1 Project 2 Project 3 -$1,000 -$1,000 -$1,000 1 2,500 1,960 1,400 2 -840 950 -200
A firm is considering the following independent projects. Project Investment Present value offuture cash flows NPV A $130 $176 $46 B $103 $115 $12 C $183 $287 $104 D $161 $199 $38 E $184 $273 $89 What is the Profitability Index of Project B? Question 5Answer a. 0.85 b. 1.12 c. 0.89 d. 1.18
Which of the following statement is true? * IRR and discount rate all have the same meaning.... If BCR is less than zero, an investment to a conservation project is worthwhile.... Both of them are true
(a) For each of the projects in the table below identify the simple investments and the non-simple investments. (b) For each of the projects in the table below with an internal rate of return (IRR), determine that IRR. In A, $ В, $ C, $ -17 42.76 -65,500 1 20 |-18 -12,500 2 10 18 -6,459
Consider the following two mutually exclusive investment projects:Project Cash Flowsn A B 0 -$4,000 -$8,5001 $400 $11,5002 $7,000 $400Assume that the MARR = 15%.(a) Using the NPW criterion, which project would you select?(b) On the same chart, sketch the PW(i) function for each alternative fori = 0% and 50%. For what range of i would you prefer Project B?
Q3. Consider the cash flows for the investment projects given in Table. Assume that the MARR = 10%. (a) Suppose A, B, and C are mutually exclusive projects. Which project would be selected on the basis of the IRR criterion? (b) Assume that projects C and E are mutually exclusive. Using the IRR criterion, which Project would you select? Net Cash Flow A В C D E -4,250 1,500 3,250 1,600 1,200 2,500 -835 -4,250 3,200 2,850 4,250 2,850 2,900 1,050 500 -4,850 2,100 2,100 2,100 2,100 -835 3 800 -835 4 300 -835
You identify an investment project with the following cash flows. If the discount rate is 10%, what is the present value of these cash flows? Y1- $500 Y2- $550 Y3- $800 Y4- $450. Please type answer no write by hend.

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