Question

a project where the projected costs and benefits are spread over five years with the following...

a project where the projected costs and benefits are spread over five years with the following data:

• Estimated costs are $100,000 in Year 1 and $25,000 each for years 2, 3, 4, and 5.

• Estimated benefits are $0 in Year 1 and $80,000 each for years 2, 3, 4, and 5.

• Use a discount rate of 8%

Calculate the Return on Investment and Payback for the project.

0 0
Add a comment Improve this question Transcribed image text
Answer #1
year
1 2 3 4 5
Cost $100,000.00 $25,000.00 $25,000.00 $25,000.00 $25,000.00
Benefit $0.00 $80,000.00 $80,000.00 $80,000.00 $80,000.00
Net cash flow -$100,000.00 $55,000.00 $55,000.00 $55,000.00 $55,000.00
Discount rate 8% 8% 8% 8% 8%
Present value -$100,000.00 $50,925.93 $47,153.64 $43,660.77 $40,426.64
Return of investment 30.69%
Payback period 1.82
Add a comment
Know the answer?
Add Answer to:
a project where the projected costs and benefits are spread over five years with the following...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • A project where the projected costs and benefits are spread over five years with the following...

    A project where the projected costs and benefits are spread over five years with the following data: • Estimated costs are $100,000 in Year 1 and $25,000 each for years 2, 3, 4, and 5. • Estimated benefits are $0 in Year 1 and $80,000 each for years 2, 3, 4, and 5. • Use a discount rate of 8% 1.Calculate the following: a. Calculate cash flow b. Show the discount factor c. Show discounted costs and discounted benefits d....

  • Using information about the estimated costs, estimated benefits and a discount rate of 9% for Project...

    Using information about the estimated costs, estimated benefits and a discount rate of 9% for Project XYZ, calculate the discount factor for each year, the discounted costs, the discounted benefits, the return-on-investment (ROI) and the net-present value (NPV). In which year does the payback occurs? Total | O 175,000 ? ? Estimated Costs Discount Factor Discounted Costs | 22.500,7 22,500 ? ? Year 2 | 22,500 ? ? 3 | 22,500 ? ? 4 22,500 ? ? | 5 |...

  • Question Two Using information about the estimated costs, estimated benefits and a discount rate of 9%...

    Question Two Using information about the estimated costs, estimated benefits and a discount rate of 9% for Project XYZ, calculate the discount factor for each year, the discounted costs, the discounted benefits, the return-on-investment (ROI) and the net-present value (NPV). In which year does the payback occurs? Total Year 0 1 2 3 4 5 175,000|22,500|22,500122,500122,500 22,500 Estimated Costs Discount Factor Discounted Costs 080,000|80,00080,000|80,000 80,000 Estimated Benefits Discount Factor Discounted Benefits Discounted Benefits - Costs D Cumulative Benefits-Costs 21 21...

  • needs to be dont like this excel sheet example all values must be filled in and...

    needs to be dont like this excel sheet example all values must be filled in and in an excel sheet with formulas. using the data procided all parameters in the excel table shown have to be calculated that excel sheet image is just an example and have to come up with the sams dable with the data procided in the first table Perform a financial analysis for a project where the projected costs and benefits are spread over five years...

  • Look at the table below with benefits and costs of a proposed project over 3 years....

    Look at the table below with benefits and costs of a proposed project over 3 years. What’s the net present value of the project assuming a 5% discount rate? Look at the table below with benefits and costs of a proposed project over 3 years. Year Benefits Costs / 1 2 125 150 250 75 25 3 / 100 / What's the net present value of the project assuming a 5% discount rate? Select one: O a. -$10.6 O b....

  • CARDINAL COMPANY IS CONSIDERING A FIVE-YEAR PROJECT THAT WOULD REQUIRE A $2,975,000 INVESTMENT IN EQUIPMENT WITH...

    CARDINAL COMPANY IS CONSIDERING A FIVE-YEAR PROJECT THAT WOULD REQUIRE A $2,975,000 INVESTMENT IN EQUIPMENT WITH A USEFUL LIFE OF YEARS AND NO SALVAGE VALUE. THE COMPANY'S DISCOUNT RATE IS 14%. THE PROJECT WOULD PROVIDE NET OPERATING INCOME EACH OF THE 5 YEARS AS FOLLOWS: SALES                                                        $2,735,000 VARIABLE EXPENSES                                 1,000,000 CONTRIBUTION MARGIN                             $1,735,000 FIXED EXPENSES: ADVERTISING, SALARIES, AND OTHER FIXED OUT OF POCKET COSTS              $735,000 DEPRECIATION                                                                                                        $ 95,000 TOTAL FIXED EXPENSES                                                                                                                $1,330,000 NET OPERATING EXPENSES   ...

  • I could really use some help with this system analysis question I got. Thank you!!!! Using...

    I could really use some help with this system analysis question I got. Thank you!!!! Using the following data, create a table similar to the one at the bottom of the page. Note that there are 8 years of data here vs. 5 years in the table. You will have to add the extra 3 years to your table. There is also a different discount factor for each year. Calculate the net present value, the payback period, and the return...

  • A five-year project has a projected net cash flow of $17,000 in year 1, $25,000 in...

    A five-year project has a projected net cash flow of $17,000 in year 1, $25,000 in year 2, $27,000 in year 3, $20,000 in year 4, and $15,000 in year 5. It will cost $60,000 to implement the project. If the required rate of return is 23 percent, conduct a discounted cash flow calculation to determine the NPV. 1) the NPV for the project is ____

  • (1) A firm is considering an expansion project that will last three years. The project requires...

    (1) A firm is considering an expansion project that will last three years. The project requires an immediate purchase of a new equipment that costs $900,000. The equipment will be fully depreciated using straight-line method over the next three years. The resale price of the equipment at the end of year three is estimated to be $200,000. The project will generate annual sales of $750,000 and incur annual costs (all costs except depreciation expense) of $200,000 for each of the...

  • A proposed project has the following costs and benefits: 2. Benefits Year Costs $2,000 0 to b d $1,000 1,000 1,000...

    A proposed project has the following costs and benefits: 2. Benefits Year Costs $2,000 0 to b d $1,000 1,000 1,000 2,000 2,000 1 002 h 2 4 Assuming an interest rate of 10 %, the project's simple payback period is most nearly A. 2 years. B. 3 years. sng o butro bs wo RAM i C. 4 years. D. 5 years. E. 6 years. Using the information in question 2, and linear interpolation, the project's discounted payback period is...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT