The Net Present Value for each press. Introduction: The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. N P V = CF 1 ( 1 + r ) 1 + CF 2 ( 1 + r ) 2 + CF 3 ( 1 + r ) 3 + CF 4 ( 1 + r ) 4 − I 0

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Answer 1

Question

Chapter 10, Problem 10.10P

a)

Summary Introduction

To determine:

The Net Present Value for each press.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

NPV=CF1(1+r)1+CF2(1+r)2+CF3(1+r)3+CF4(1+r)4−I0

b)

Summary Introduction

To determine:

The acceptability of each press based on NPV.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. NPV is used in capital budgeting as a criterion to analyze the profitability of projects.

c)

Summary Introduction

To determine:

Ranking of the press from the best to worst.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

d)

Summary Introduction

To determine:

The profitability index of each press.

Introduction:

Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

e)

Summary Introduction

To determine:

Ranking of the press from the best to worst using PI.

Introduction:

Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

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NPV—Mutually exclusive projects Hook Industries is considering the replacement of one of its old metal stamping machines. Three alternative replacement machines are under consideration. The relevant cash flows associated with each are shown in the following table: LOADING... . The firm's cost of capital is 12%. a. Calculate the net present value (NPV) of each press. b. Using NPV, evaluate the acceptability of each press. c. Rank the presses from best to worst using NPV. d. Calculate the profitability index (PI) for each press. e. Rank the presses from best to worst using PI. a. The NPV of press A is . (Round to the nearest cent.) The NPV of press B is . (Round to the nearest cent.) The NPV of press C is . (Round to the nearest cent.) b. Based on NPV, Hook Industries shouldpress A. (Select from the drop-down menu.) Based on NPV, Hook Industries should accept accept reject press B. (Select from the drop-down menu.) Based on NPV, Hook…

NPV—Mutually exclusive projects Hook Industries is considering the replacement of one of its old metal stamping machines. Three alternative replacement machines are under consideration. The relevant cash flows associated with each are shown in the following table: LOADING... . The firm's cost of capital is 12%. a. Calculate the net present value (NPV) of each press. b. Using NPV, evaluate the acceptability of each press. c. Rank the presses from best to worst using NPV. d. Calculate the profitability index (PI) for each press. e. Rank the presses from best to worst using PI. a. The NPV of press A is $nothing. (Round to the nearest cent.) The NPV of press B is $nothing. (Round to the nearest cent.) The NPV of press C is $nothing. (Round to the nearest cent.) b. Based on NPV, Hook Industries should ▼ accept reject press A. (Select from the drop-down menu.) Based on NPV, Hook Industries should ▼ accept reject press B. (Select from…

IRR: Mutually exclusive projects Nile Inc. wants to choose the better of two mutually exclusive projects that expand warehouse capacity. The projects' cash flows are shown in the following table: . The cost of capital is 18%. a. The internal rate of return (IRR) of project X is %. (Round to two decimal places.) Data table Is project X acceptable on the basis of IRR? (Select the best answer below.) (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Yes O No Project X $500,000 Project Y $310,000 The internal rate of return (IRR) of project Y is %. (Round to two decimal places.) Initial investment (CF) Is project Y acceptable on the basis of IRR? (Select the best answer below.) Year (t) Cash inflows (CF,) $120,000 $140,000 $105,000 $60,000 1 $100,000 O Yes $160,000 O No $170,000 $190,000 b. Which project is preferred? (Select the best answer below.) $250,000 $30,000 OA. Project X N 34 5

Answer 2

Question

Chapter 10, Problem 10.10P

a)

Summary Introduction

To determine:

The Net Present Value for each press.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

NPV=CF1(1+r)1+CF2(1+r)2+CF3(1+r)3+CF4(1+r)4−I0

b)

Summary Introduction

To determine:

The acceptability of each press based on NPV.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. NPV is used in capital budgeting as a criterion to analyze the profitability of projects.

c)

Summary Introduction

To determine:

Ranking of the press from the best to worst.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

d)

Summary Introduction

To determine:

The profitability index of each press.

Introduction:

Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

e)

Summary Introduction

To determine:

Ranking of the press from the best to worst using PI.

Introduction:

Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

Expert Solution & Answer

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Answer 3

Question

Chapter 10, Problem 10.10P

a)

Summary Introduction

To determine:

The Net Present Value for each press.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

NPV=CF1(1+r)1+CF2(1+r)2+CF3(1+r)3+CF4(1+r)4−I0

b)

Summary Introduction

To determine:

The acceptability of each press based on NPV.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. NPV is used in capital budgeting as a criterion to analyze the profitability of projects.

c)

Summary Introduction

To determine:

Ranking of the press from the best to worst.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

d)

Summary Introduction

To determine:

The profitability index of each press.

Introduction:

Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

e)

Summary Introduction

To determine:

Ranking of the press from the best to worst using PI.

Introduction:

Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

Expert Solution & Answer

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See solution

Answer 4

Question

Chapter 10, Problem 10.10P

a)

Summary Introduction

To determine:

The Net Present Value for each press.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

NPV=CF1(1+r)1+CF2(1+r)2+CF3(1+r)3+CF4(1+r)4−I0

b)

Summary Introduction

To determine:

The acceptability of each press based on NPV.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. NPV is used in capital budgeting as a criterion to analyze the profitability of projects.

c)

Summary Introduction

To determine:

Ranking of the press from the best to worst.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

d)

Summary Introduction

To determine:

The profitability index of each press.

Introduction:

Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

e)

Summary Introduction

To determine:

Ranking of the press from the best to worst using PI.

Introduction:

Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

Expert Solution & Answer

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Answer 5

Chapter 10, Problem 10.10P

a)

Summary Introduction

To determine:

The Net Present Value for each press.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

NPV=CF1(1+r)1+CF2(1+r)2+CF3(1+r)3+CF4(1+r)4−I0

b)

Summary Introduction

To determine:

The acceptability of each press based on NPV.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. NPV is used in capital budgeting as a criterion to analyze the profitability of projects.

c)

Summary Introduction

To determine:

Ranking of the press from the best to worst.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

d)

Summary Introduction

To determine:

The profitability index of each press.

Introduction:

Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

e)

Summary Introduction

To determine:

Ranking of the press from the best to worst using PI.

Introduction:

Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

Answer 6

Chapter 10, Problem 10.10P

a)

Summary Introduction

To determine:

The Net Present Value for each press.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

NPV=CF1(1+r)1+CF2(1+r)2+CF3(1+r)3+CF4(1+r)4−I0

Answer 7

Chapter 10, Problem 10.10P

a)

Summary Introduction

To determine:

The Net Present Value for each press.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

NPV=CF1(1+r)1+CF2(1+r)2+CF3(1+r)3+CF4(1+r)4−I0

Answer 8

b)

Summary Introduction

To determine:

The acceptability of each press based on NPV.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. NPV is used in capital budgeting as a criterion to analyze the profitability of projects.

Answer 9

b)

Summary Introduction

To determine:

The acceptability of each press based on NPV.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. NPV is used in capital budgeting as a criterion to analyze the profitability of projects.

Answer 10

c)

Summary Introduction

To determine:

Ranking of the press from the best to worst.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

Answer 11

c)

Summary Introduction

To determine:

Ranking of the press from the best to worst.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

Answer 12

d)

Summary Introduction

To determine:

The profitability index of each press.

Introduction:

Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

Answer 13

d)

Summary Introduction

To determine:

The profitability index of each press.

Introduction:

Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

Answer 14

e)

Summary Introduction

To determine:

Ranking of the press from the best to worst using PI.

Introduction:

Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

Answer 15

e)

Summary Introduction

To determine:

Ranking of the press from the best to worst using PI.

Introduction:

Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

Answer 16

Expert Solution & Answer

Answer 17

Expert Solution & Answer

Answer 18

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Answer 19

Ch. 10.1 - What is the financial managers goal in selecting...Ch. 10.2 - What is the payback period? How is it calculated?Ch. 10.2 - What weaknesses are commonly associated with the...Ch. 10.3 - How is the net present value (NPV) calculated for...Ch. 10.3 - Prob. 10.5RQ Ch. 10.3 - Prob. 10.6RQ Ch. 10.4 - Prob. 10.8RQ Ch. 10.4 - Prob. 10.9RQ Ch. 10.4 - Prob. 10.10RQ Ch. 10.5 - How is a net present value profile used to compare...

The Net Present Value for each press. Introduction: The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. N P V = CF 1 ( 1 + r ) 1 + CF 2 ( 1 + r ) 2 + CF 3 ( 1 + r ) 3 + CF 4 ( 1 + r ) 4 − I 0

Solution Summary: The author explains how the Net Present Value for a series of cash flows can be calculated using equations.

Concept explainers

Videos

To determine:

The Net Present Value for each press.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

NPV=CF1(1+r)1+CF2(1+r)2+CF3(1+r)3+CF4(1+r)4−I0

To determine:

Ranking of the press from the best to worst.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

To determine:

The profitability index of each press.

Introduction:

Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

To determine:

Ranking of the press from the best to worst using PI.

Introduction:

Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

Want to see the full answer?

Chapter 10 Solutions

The Net Present Value for each press. Introduction: The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. N P V = CF 1 ( 1 + r ) 1 + CF 2 ( 1 + r ) 2 + CF 3 ( 1 + r ) 3 + CF 4 ( 1 + r ) 4 − I 0

Solution Summary: The author explains how the Net Present Value for a series of cash flows can be calculated using equations.

Concept explainers

Videos

To determine: The Net Present Value for each press. Introduction: The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. NPV=CF1(1+r)1+CF2(1+r)2+CF3(1+r)3+CF4(1+r)4−I0

To determine: Ranking of the press from the best to worst. Introduction: The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

To determine: The profitability index of each press. Introduction: Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

To determine: Ranking of the press from the best to worst using PI. Introduction: Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

Want to see the full answer?

Chapter 10 Solutions

To determine:

The Net Present Value for each press.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

NPV=CF1(1+r)1+CF2(1+r)2+CF3(1+r)3+CF4(1+r)4−I0

To determine:

Ranking of the press from the best to worst.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value.

To determine:

The profitability index of each press.

Introduction:

Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.

To determine:

Ranking of the press from the best to worst using PI.

Introduction:

Profitability Index which is an index that measures that the costs and benefits of a project as the ratio of present value of future cash flows to the initial investment.