Homework Answers
| 12% | PV at 12% | 13% | PV at 13% | 14% | PV at 14% | 15% | PV at 15% | 16% | PV at 16% | ||
| 1 | 2 | 3 | 4=2*3 | 5 | 6=2*5 | 7 | 8=2*7 | 9 | 10=2*9 | 11 | 12=2*11 |
| Initial cash outlay | -345000 | 1 | -345000.00 | 1 | -345000.00 | 1 | -345000.00 | 1 | -345000.00 | 1 | -345000.00 |
| Income at EOY 1 | -74000 | 0.8929 | -66074.60 | 0.885 | -58476.02 | 0.8772 | -51295.17 | 0.8696 | -44606.28 | 0.8621 | -38455.07 |
| Income at EOY 2 | 154410 | 0.7972 | 123095.65 | 0.7831 | 96396.21 | 0.7695 | 74176.88 | 0.7561 | 56085.14 | 0.7432 | 41682.48 |
| Income at EOY 3 | 194154 | 0.7118 | 138198.82 | 0.6931 | 95785.60 | 0.675 | 64655.28 | 0.6575 | 42510.85 | 0.6407 | 27236.70 |
| Income at EOY 4 | 222705 | 0.6355 | 141529.03 | 0.6133 | 86799.75 | 0.5921 | 51394.13 | 0.5718 | 29387.17 | 0.5523 | 16230.53 |
| Income at EOY 5 | 273124 | 0.5674 | 154970.56 | 0.5428 | 84118.02 | 0.5194 | 43690.90 | 0.4972 | 21723.11 | 0.4761 | 10342.38 |
| 146719.45 | -40376.44 | -162377.97 | -239900.01 | -287962.99 | |||||||
| Profitability Index= | |||||||||||
| 1+(NPV/Initial Investment) | 1+(146719.45/345000) | 1+(-40376.44/345000)= | 1+(-162377.97/345000)= | 1+(-239900.01/345000)= | 1+(-287962.99/345000)= | ||||||
| 1.43 | 0.88 | 0.53 | 0.30 | 0.17 | |||||||
Add Answer to:
VVK3HW Protinaxi Acme General Stores is considering a project to open a new store in a...
Acme General Stores is considering a project to open a new store in a rural town....
Acme General Stores is considering a project to open a new store in a rural town. The company will invest cash at the beginning install and stock the store. Then the company marketing team and accountants forecast the net income for this new store based on the results of other stores opened previously in similar rural towns. The flowing values are the net cash inflow and outflows. Acme Corp uses a 15% rate of return. Calculate the Profitability Index for...
Acme Corp is considering a project to increase production by expanding the production facility. The company...
Acme Corp is considering a project to increase production by expanding the production facility. The company will invest cash at the start of the project the invest in machines a training new employees in the following years while income from increased production is also received. The flowing values are the net cash inflow and outflows. Acme Corp uses a 14% rate of return. Calculate the Net Present Value for the project. Initial Cash Outlay at beginning of project Income at...
8. Abandonment options Acme Co. is considering a four-year project that will require an initial investment of $15,...
8. Abandonment options Acme Co. is considering a four-year project that will require an initial investment of $15,000. The base-case cash flows for this project are projected to be $12,000 per year. The best-case cash flows are projected to be $19,000 per year, and the worst-case cash flows are projected to be -$3,000 per year. The company's analysts have estimated that there is a 50% probability that the project will generate the base-case cash flows. The analysts also think that...
XYZ Company is considering the purchase of a new machine. The machine will cost $200,000 and...
XYZ Company is considering the purchase of a new machine. The machine will cost $200,000 and is expected to last ten years. However, the machine will need maintenance costing $25,000 at the end of year three and at the end of year seven. In addition, purchasing this machine would require an immediate investment of $30,000 in working capital which would be released for investment elsewhere -at the end of the 10 years. The machine is expected to have a $14,000...
XYZ Company is considering the purchase of a new machine. The machine will cost $200,000 and...
XYZ Company is considering the purchase of a new machine. The machine will cost $200,000 and is expected to last ten years. However, the machine will need maintenance costing $25,000 at the end of year three and at the end of year seven. In addition, purchasing this machine would require an immediate investment of $30,000 in working capital which would be released for investment elsewhere -at the end of the 10 years. The machine is expected to have a $14,000...
Sway's Back Store is considering a project which will require the purchase of $5 million in...
Sway's Back Store is considering a project which will require the purchase of $5 million in new equipment. The equipment will be depreciated straight-line to a book value of $0.5 million over the 5-year life of the project. Annual sales from this project are estimated at $950,000. The variable cost is 40% of the annual sales and there is an annual fixed cost of $100,000. Sway's Back Store will sell the equipment at the end of the project for a...
Taylor Company is considering the purchase of a new machine. The machine will cost $180,000 and...
Taylor Company is considering the purchase of a new machine. The machine will cost $180,000 and is expected to last for 9 years. However, the machine will need maintenance costing $15,000 at the end of year four and maintenance costing $30,000 at the end of year eight. In addition, purchasing this machine would require an immediate investment of $32,000 in working capital which would be released for investment elsewhere at the end of the 9 years. The machine is expected...
You are evaluating the HomeNet project under the following assumptions: new tax laws allow 100% bonus...
You are evaluating the HomeNet project under the following
assumptions: new tax laws allow 100% bonus depreciation (all the
depreciation expense, $ 7.5 million, occurs when the asset is put
into use, in this case immediately). Research and development
expenditures total $ 15 million in year 0 and selling, general,
and administrative expenses are $ 2.8 million per year (assuming
there is no cannibalization). Also assume HomeNet will have no
incremental cash or inventory requirements (products will be
shipped directly...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: ? Initial investment Annual cost savings Salvage value in 6 years $30,000 20% of original cost of the equipment $11,000 10% Repair in 4 years Cost of capital Life of project 6 years If the new piece of equipment is purchased then the equipment currently being used can be sold at the time of purchase of the new equipment...
Acme General Stores is considering a project to open a new store in a rural town. The company will invest cash at the beginning install and stock the store. Then the company marketing team and accountants forecast the net income for this new store based on the results of other stores opened previously in similar rural towns. The flowing values are the net cash inflow and outflows. Acme Corp uses a 15% rate of return. Calculate the Profitability Index for...
Acme Corp is considering a project to increase production by expanding the production facility. The company will invest cash at the start of the project the invest in machines a training new employees in the following years while income from increased production is also received. The flowing values are the net cash inflow and outflows. Acme Corp uses a 14% rate of return. Calculate the Net Present Value for the project. Initial Cash Outlay at beginning of project Income at...
8. Abandonment options Acme Co. is considering a four-year project that will require an initial investment of $15,000. The base-case cash flows for this project are projected to be $12,000 per year. The best-case cash flows are projected to be $19,000 per year, and the worst-case cash flows are projected to be -$3,000 per year. The company's analysts have estimated that there is a 50% probability that the project will generate the base-case cash flows. The analysts also think that...
XYZ Company is considering the purchase of a new machine. The machine will cost $200,000 and is expected to last ten years. However, the machine will need maintenance costing $25,000 at the end of year three and at the end of year seven. In addition, purchasing this machine would require an immediate investment of $30,000 in working capital which would be released for investment elsewhere -at the end of the 10 years. The machine is expected to have a $14,000...
XYZ Company is considering the purchase of a new machine. The machine will cost $200,000 and is expected to last ten years. However, the machine will need maintenance costing $25,000 at the end of year three and at the end of year seven. In addition, purchasing this machine would require an immediate investment of $30,000 in working capital which would be released for investment elsewhere -at the end of the 10 years. The machine is expected to have a $14,000...
Taylor Company is considering the purchase of a new machine. The machine will cost $180,000 and is expected to last for 9 years. However, the machine will need maintenance costing $15,000 at the end of year four and maintenance costing $30,000 at the end of year eight. In addition, purchasing this machine would require an immediate investment of $32,000 in working capital which would be released for investment elsewhere at the end of the 9 years. The machine is expected...
You are evaluating the HomeNet project under the following
assumptions: new tax laws allow 100% bonus depreciation (all the
depreciation expense, $ 7.5 million, occurs when the asset is put
into use, in this case immediately). Research and development
expenditures total $ 15 million in year 0 and selling, general,
and administrative expenses are $ 2.8 million per year (assuming
there is no cannibalization). Also assume HomeNet will have no
incremental cash or inventory requirements (products will be
shipped directly...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: ? Initial investment Annual cost savings Salvage value in 6 years $30,000 20% of original cost of the equipment $11,000 10% Repair in 4 years Cost of capital Life of project 6 years If the new piece of equipment is purchased then the equipment currently being used can be sold at the time of purchase of the new equipment...
Most questions answered within 3 hours.
-
Calculate the number density of argon gas at a temperature of
24C and a pressure of...
asked 44 minutes ago -
Alternative
Classification
How to Estimate
Probabilities from Data? ( For continuous Attributes)
And How to generate...
asked 47 minutes ago -
An explosion breaks a 20.0-kg object into three parts. The
object is initially moving at a...
asked 1 hour ago -
Calculate the approximate number of residues of Rubisco, which
is involved in carbon fixation in plants,...
asked 2 hours ago -
Other decisions about scientific claims can have a much broader
impact.ENERGYarrow-10x10.png, environment, health, security - all...
asked 3 hours ago -
I need to write a research paper and work cited about this
topic: The United States...
asked 3 hours ago -
Hello! I was wondering if I could have some help?
If the vapor pressure of carvone...
asked 4 hours ago -
An economist wants to estimate the mean per capita income (in
thousands of dollars) for a...
asked 4 hours ago -
What would be the input/output characteristic of a circuit
obtained by putting two of your 2's-complementers...
asked 4 hours ago -
In Drosophila, the transition from the syncytial blastoderm
stage to the cellular blastoderm stage is a...
asked 5 hours ago -
Project management question:
Name 3 different types of resources (hint: humans are one
type)
asked 5 hours ago -
Consider the following reaction: C 2H 2( g) + 2H 2( g) C 2H 6(
g)...
asked 5 hours ago