Homework Answers
Ans 5.12 years
Payback Period is 5.12 years
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US Robotics is evaluating a new product line. The CFO asks for an estimate of number...
US Robotics is evaluating a new product line. The CFO asks for an estimate of number...
US Robotics is evaluating a new product line. The CFO asks for an estimate of number of years to recover the initial investment, ignoring the time value of money. You realize that this is the payback period. The estimated cash flows from the new product line appear below. (Answer in years, round to 2 places) Year 0 cash flow = -90,000 Year 1 cash flow = -41,000 Year 2 cash flow = 29,000 Year 3 cash flow = 29,000 Year...
US Robotics is evaluating a new product line. The CFO asks for an estimate of number...
US Robotics is evaluating a new product line. The CFO asks for an estimate of number of years to recover the initial investment, ignoring the time value of money. You realize that this is the payback period. The estimated cash flows from the new product line appear below. (Answer in years, round to 2 places) Year 0 cash flow = -90,000 Year 1 cash flow = -41,000 Year 2 cash flow = 29,000 Year 3 cash flow = 29,000 Year...
Nano Specialist is considering an upgrade project. The estimated cash flows from the upgrade project appear...
Nano Specialist is considering an upgrade project. The estimated cash flows from the upgrade project appear below. What is the project's payback period? Note that year 0 and year 1 cash flows are negative. (Answer in years, round to 2 places) Year 0 cash flow = -79,000 Year 1 cash flow = -36,000 Year 2 cash flow = 24,000 Year 3 cash flow = 31,000 Year 4 cash flow = 27,000 Year 5 cash flow = 27,000 Year 6 cash...
Suppose Praxis Corporation's CFO is evaluating a project with the following cash inflows. She does not...
Suppose Praxis Corporation's CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost; however, she does know that the project's regular payback period is 2.5 years. If the project's weighted average cost of capital (WACC) is 8%, what is its NPV? Year Cash Flow Year 1 $300,000 Year 2 $400,000 Year 3 $425,000 Year 4 $450,000 $451,626 $376,355 $395,173 $432,808 Which of the following statements indicate a disadvantage of using the discounted...
Suppose Praxis Corporation's CFO is evaluating a project with the following cash inflows. She does not...
Suppose Praxis Corporation's CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost; however, she does know that the project's regular payback period is 2.5 years. Year Year 1 Year 2 Year 3 Year 4 Cash Flow $325,000 $475,000 $500,000 $450,000 If the project's weighted average cost of capital (WACC) is 9%, what is its NPV? $317,561 O $282,277 O $352,846 O $388,131 Which of the following statements indicate a disadvantage of...
Suppose Praxis Corporation's CFO is evaluating a project with the following cash inflows. She does not...
Suppose Praxis Corporation's CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost; however, she does know that the project's regular payback period is 2.5 years. Year Cash Flow Year 1 $275.000 Year 2 Year 3 Year 4 $400,000 $475,000 $475,000 If the project's weighted average cost of capital (WACC) is 9%, what is its NPV? $322,792 $436,718 $379,755 $455,706 Which of the following statements indicate a disadvantage of using the discounted...
Robinson Hardware is adding a new product line at will require anvestment of $1,454,000. Managers estimate...
Robinson Hardware is adding a new product line at will require anvestment of $1,454,000. Managers estimate that this investment will have a 10 years and generate net cash $280.000 the second year, and $230,000 each year thereafter for eight years Compute the payback period. Round to one decimal place flows of $330.000 the first year The payback is D years Robinson Hardware is adding a new product line that will require an investment of $1,454,000. Managers estimate that this investment...
Cash Payback Method Lily Products Company is considering an investment in one of two new product...
Cash Payback Method Lily Products Company is considering an investment in one of two new product lines. The investment required for either product line is $540,000. The net cash flows associated with each product are as follows: Year Liquid Soap Body Lotion $170,000 $ 90,000 150,000 90,000 90,000 120,000 90,000 100,000 70,000 90,000 90,000 40,000 40,000 30,000 90,000 90,000 Total $720,000 $720,000 a. Recommend a product offering to Lily Products Company, based on the cash payback period for each product...
Suppose ABC Telecom Inc.’s CFO is evaluating a project with the following cash inflows. She does...
Suppose ABC Telecom Inc.’s CFO is evaluating a project with the following cash inflows. She does not know the project’s initial cost; however, she does know that the project’s regular payback period is 2.5 years. Year Cash Flow Year 1 $350,000 Year 2 $400,000 Year 3 $450,000 Year 4 $425,000 1.) If the project’s weighted average cost of capital (WACC) is 8%, what is its NPV? $343,541 $361,622 $433,946 $325,460 2.) Which of the following statements indicate a disadvantage of...
Suppose ABC Telecom Inc.'s CFO is evaluating a project with the following cash inflows. She does...
Suppose ABC Telecom Inc.'s CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost; however, she does know that the project's regular payback period is 2.5 years. Year Cash Flow Year 1 $300,000 Year 2 Year 3 Year 4 $500,000 $475,000 $475,000 If the project's weighted average cost of capital (WACC) is 7%, what is its NPV? $472,681 $429,710 $515,652 $386,739 Which of the following statements indicate a disadvantage of using the...
US Robotics is evaluating a new product line. The CFO asks for an estimate of number of years to recover the initial investment, ignoring the time value of money. You realize that this is the payback period. The estimated cash flows from the new product line appear below. (Answer in years, round to 2 places) Year 0 cash flow = -90,000 Year 1 cash flow = -41,000 Year 2 cash flow = 29,000 Year 3 cash flow = 29,000 Year...
Suppose Praxis Corporation's CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost; however, she does know that the project's regular payback period is 2.5 years. If the project's weighted average cost of capital (WACC) is 8%, what is its NPV? Year Cash Flow Year 1 $300,000 Year 2 $400,000 Year 3 $425,000 Year 4 $450,000 $451,626 $376,355 $395,173 $432,808 Which of the following statements indicate a disadvantage of using the discounted...
Suppose Praxis Corporation's CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost; however, she does know that the project's regular payback period is 2.5 years. Year Year 1 Year 2 Year 3 Year 4 Cash Flow $325,000 $475,000 $500,000 $450,000 If the project's weighted average cost of capital (WACC) is 9%, what is its NPV? $317,561 O $282,277 O $352,846 O $388,131 Which of the following statements indicate a disadvantage of...
Suppose Praxis Corporation's CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost; however, she does know that the project's regular payback period is 2.5 years. Year Cash Flow Year 1 $275.000 Year 2 Year 3 Year 4 $400,000 $475,000 $475,000 If the project's weighted average cost of capital (WACC) is 9%, what is its NPV? $322,792 $436,718 $379,755 $455,706 Which of the following statements indicate a disadvantage of using the discounted...
Robinson Hardware is adding a new product line at will require anvestment of $1,454,000. Managers estimate that this investment will have a 10 years and generate net cash $280.000 the second year, and $230,000 each year thereafter for eight years Compute the payback period. Round to one decimal place flows of $330.000 the first year The payback is D years Robinson Hardware is adding a new product line that will require an investment of $1,454,000. Managers estimate that this investment...
Cash Payback Method Lily Products Company is considering an investment in one of two new product lines. The investment required for either product line is $540,000. The net cash flows associated with each product are as follows: Year Liquid Soap Body Lotion $170,000 $ 90,000 150,000 90,000 90,000 120,000 90,000 100,000 70,000 90,000 90,000 40,000 40,000 30,000 90,000 90,000 Total $720,000 $720,000 a. Recommend a product offering to Lily Products Company, based on the cash payback period for each product...
Suppose ABC Telecom Inc.'s CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost; however, she does know that the project's regular payback period is 2.5 years. Year Cash Flow Year 1 $300,000 Year 2 Year 3 Year 4 $500,000 $475,000 $475,000 If the project's weighted average cost of capital (WACC) is 7%, what is its NPV? $472,681 $429,710 $515,652 $386,739 Which of the following statements indicate a disadvantage of using the...
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