c.The correct answers are:
B and D
This is a conventional cash flow pattern, hence, A is not true
Operating cash flows = 296000-16000 = $280,000
Timeline is correctly depicted in D
Relevant cash flow and timeline depiction For each of the following projects, determine the relevant cash...
Net cash flow and timeline depiction For each of the following projects, determine the net cash flows, and depict the cash flows on a time line. a. A project that requires an initial investment of $120,000 and will generate annual operating cash inflows of $25,000 for the next 18 years. In each of the 18 years, maintenance of the project will require a $5,000 cash outflow. b. A new machine with an installed cost of $85,000. Sale of the old...
Relevant cash flow and timeline depiction For each of the following projects, determine the relevant cash flows, and depict the cash flows on a time line. a. A project that requires an initial investment of $121,000 and will generate annual operating cash inflows of $26,000 for the next 20 years. In each of the 20 years, maintenance of the project will require a $4,700 cash outflow. b. A new machine with an installed cost of $84,000. Sale of the old...
Relevant cash flow and timeline depiction For each of the following projects, determine the relevant cash flows, and depict the cash flows on a time line. a. A project that requires an initial investment of $120,000 and will generate annual operating cash inflows of $29,000 for the next 20 years. In each of the 20 years, maintenance of the project will require a $5,000 cash outflow. b. A new machine with an installed cost of $82,000. Sale of the old...
I cant move to other questions before answering this one first.... Relevant cash flow and timeline depiction For each of the following projects, determine the relevant cash flows, and depict the cash flows on a time line. a. A project that requires an initial investment of $116,000 and will generate annual operating cash inflows of $29,000 for the next 18 years. In each of the 18 years, maintenance of the project will require a $5,500 cash outflow. b. A new...
CASH FLOW DIAGRAMS (10 points each) 1. A company made an investment of $16,000 in a machine to manufacture a new product. The sale of the product is expected to provide uniform annual revenue of $8,000 for 6 years. Annual operating and maintenance expenses are $2,000. The salvage value of the machine at the end of years is $7,000. Draw the Cash flow diagram, and net cash flow diagram.
Consider the following two mutually exclusive projects: Year 0 Cash Flow (A) 2360,000 35,000 55,000 55,000 430,000 Cash Flow (B) $45,000 23,000 21,000 18,500 13,600 1 2 3 4 ces Whichever project you choose, if any, you require a return of 14 percent on your investment a-1 What is the payback period for each project? (Do not round Intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) years Project A Project B years -1 What is the...
NOTE: Annual cash net flow should be multiplied by PVF for annuity EXERCISE 13–7 Net Present Value Analysis of Two Alternatives Perit Industries has $100,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: The working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries' discount rate is 14%. Project A Project B Cost of equipment required ............. Working capital investment...
Important: Show your solutions! QUESTION 1: Consider the following two projects: Year Cash Flow (A) Cash Flow (B) -$364,000 -$52,000 25,000 46,000 68,000 22,000 68,000 21,500 458,000 17,500 Whichever project you choose, if any, you require a return of 11 percent on your investment. 1) Suppose these two projects are independent. Which project(s) should you accept based on: a. The Payback rule? Explain. (1096) b. The Profitability Index rule? Explain. (10%) c. The IRR rule? Explain. (10%) d. The NPV...
33. The cash payback method can be used only when net cash inflows are the same for each period. true or false 34. The average rate of return method of analyzing capital investment decisions measures the average rate of return from using the asset over its entire life. True False 35. A company is considering purchasing a machine for $21,000. The machine will generate operating income of $2,000; annual net cash inflows from the machine will be $3,500. The cash...
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$ 360,000 –$ 45,000 1 35,000 23,000 2 55,000 21,000 3 55,000 18,500 4 430,000 13,600 Whichever project you choose, if any, you require a return of 14 percent on your investment. c-1 What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c-2 If you apply the NPV...