Year | Cash Flow |
Cumulative Cashflow (currecnt cash flow + all previous cashflows) |
1 | 70000 | 70000 |
2 | 60000 | 130000 |
3 | 55000 | 185000 |
4 | 40000 | 225000 |
5 | 30000 | 255000 |
6 | 25000 | 280000 |
As Initial Outlay is 200000, it will be recoverd in between year 3 & 4. Therefore, Payback Period will be between 3rd and 4th year. |
||
Payback Period will be 3 years + proportionate of
4th year Payback Pariod = 3+[(200000-185000)/(225000-185000)] |
||
Payback Period = 3.375 years |
NO, the Investment should NOT be made.
92: An investment of $200,000 is expected to generate the following WW,000 is expected to generate...
Problem 3: A manufacturing equipment investment of $250,000 is expected to generate the following cash flows over the next five years: Yr Add'l Cash Sales Cost Annual Savings machin e mainten ance Expens es 1 2 3 4 $30,000 35,000 30,000 35,000 35,000 $4,000 12,000 10,000 10,000 10,000 $6,000 15,000 12,000 14,000 14,000 5 Required: A. Draw a cash flow timeline for the proposal. B. Compute payback period of the investment. C. Should the investment be made if management wants...
A project is expected to demand initial upfront investment of $200,000. The project is expected to generate $25,000 cash inflow in the first year, $70,000 in the second year, $85,000 in the third year, and $100,000 in the fourth year. How long is the payback period? Longer than 3 years but shorter than 4 years Roughly 3 years Roughly 1 year Roughly 2 years Agent should always maximize book value of the firm for the owners. True False
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For the table, it's the annual machine maintenaince expense For Years 1 _ 2000 2_3000 3_3000 4_4000 5_4000 Thanks A manufacturing equipment investment of $150,000 is expected to generate the following cash flows over the next five years: Add'l Yr Cost Annua Cash Saving machin mainter Expense $2,000 Sales $30,000 $5,000 1 40,000 5,000 2 3,000 3 40,000 8,000 3,000 4,000 4,000 4 50,000 10,000 5 50,000 10,000 Required: A. Draw a cash flow timeline for the proposal. B. Compute...
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3- A project requires an initial investment of $225,000 and is expected to generate the following net cash inflows: Year 1 $ 95000 Year 2 $ 80000 Year 3 $ 60000 Year 4 S 55000 Required :Compute net present value of the project if the minimum desired rate of return is 12%
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