Homework Answers
Part A
Methed First
Total Outflow (Inverstment)= 93,000
Years Profit Dis. Factor (11%) Present Vaue
1 35,700 .901 32165.70
2 45,900 .812 37270.80
3 50,500 .731 36915.50
4 42,500 .659 28007.50
5 21,900 .593 12993.27
Total Cash Inflow= 147352.77
NPV= Total Cash Inflow- Total Cash Outflow
1,47,352.77-93,000=54352.77
Methed First NPV= 54,352.77
Methed Second
Total Outflow (Inverstment)= 93,000
Years Profit Dis. Factor (16%) Present Vaue
1 23,200 0.862 19998.40
2 24,100 0.743 17906.30
3 37,800 0.641 24229.80
4 37,700 0.552 20810.40
5 77,500 0.476 36890.00
Total Cash Inflow= 1,19,842
NPV= Total Cash Inflow- Total Cash Outflow
1,19,842.10 -93,000=26,842.10
Methed Second NPV= 26,842.10
Part B
Methed First Should be selected.Because Methed first NPV is higher than methed second.
Add Answer to:
1 Appendix B Present value of $1. PVF PV=FV Percent Period 1% 5% 8% 9% 12%...
1 Appendix B Present value of $1. PVF PV=FV Percent Period 1% 5% 8% 9% 12%...
1 Appendix B Present value of $1. PVF PV=FV Percent Period 1% 5% 8% 9% 12% 1 2. 3 0.893 0.797 012 4 6 7 8 9 10 .............. 11 12 0.990 0.980 0.971 0.961 0.951 0.942 0.933 0.923 0.914 0.905 0.896 0.887 0.879 0.870 0.861 0.853 0.844 0.836 0.828 0.820 0.780 0.742 0.672 0.608 2% 0.980 0.961 0.942 0.924 0.906 0.888 0.871 0.853 0.837 0.820 0.804 0.788 0.773 0.758 0.743 0.728 0.714 0.700 0.686 0.673 0.610 0.552 0.453 0.372...
1 Appendix B Present value of $1. PVF PV=FV Percent Period 1% 5% 8% 9% 12%...
1 Appendix B Present value of $1. PVF PV=FV Percent Period 1% 5% 8% 9% 12% 1 2. 3 0.893 0.797 012 4 6 7 8 9 10 .............. 11 12 0.990 0.980 0.971 0.961 0.951 0.942 0.933 0.923 0.914 0.905 0.896 0.887 0.879 0.870 0.861 0.853 0.844 0.836 0.828 0.820 0.780 0.742 0.672 0.608 2% 0.980 0.961 0.942 0.924 0.906 0.888 0.871 0.853 0.837 0.820 0.804 0.788 0.773 0.758 0.743 0.728 0.714 0.700 0.686 0.673 0.610 0.552 0.453 0.372...
You are asked to evaluate the following two projects for the Norton corporation. Use a discount...
You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 13 percent. Use Appendix B:for an approximate answer but calculate your final answer using the formula and financial calculator methods. Project X (Videotapes of the Weather Report) ($18,000 Investment) Year Cash Flow $ 9,000 7,000 8,000 7,600 Project Y (Slow-Motion Replays of Commercials) ($38,000 Investment) Year Cash Flow $ 19,000 12,000 13,000 15,000 WN a. Calculate the profitability index for project X....
Cascade Mining Company expects its earnings and dividends to increase by 8 percent per year over...
Cascade Mining Company expects its earnings and dividends to
increase by 8 percent per year over the next 6 years and then to
remain relatively constant thereafter. The firm currently (that is,
as of year 0) pays a dividend of $4.5 per share. Determine the
value of a share of Cascade stock to an investor with a 11 percent
required rate of return. Use Table II to answer the question. Round
your answer to the nearest cent.
TABLE II Present...
You are asked to evaluate the following two projects for the Norton corporation. Use a discount...
You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 12 percent. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Protect X (Videotapes of the Weather Report) ($ 36,000 Investment) Year Cash Flow $18,000 16,000 17,000 16,600 Project Y (Slow-Motion Replays of Commercials) ($56.000 Investment) Year Cash Flow $ 28,000 21.000 22.000 24,000 a. Calculate the profitability index for project X....
Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment....
Keller Construction is
considering two new investments. Project E calls for the purchase
of earthmoving equipment. Project H represents an investment in a
hydraulic lift. Keller wishes to use a net present value profile in
comparing the projects. The investment and cash flow patterns are
as follows: Use Appendix B for an approximate answer but calculate
your final answer using the formula and financial calculator
methods.
Project E
Project H
($40,000 Investment)
($36,000 Investment)
Year
Cash Flow
Year
Cash Flow...
X-treme Vitamin Company is considering two investments, both of which cost $20,000. The cash flows are...
X-treme Vitamin Company is considering two investments, both of which cost $20,000. The cash flows are as follows: Year Project A Project B $23,000 $20,000 2 10,000 9,000 3 10,000 15,000 1 Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a-1. Calculate the payback period for Project A and Project B. (Round your answers to 2 decimal places.) Project A Project B Payback Period year(s) year(s) b-1. Calculate the...
Oregon Forest Products will acquire new equipment that falls under the five-year MACRS category. The cost...
Oregon Forest Products will acquire new equipment that falls under the five-year MACRS category. The cost is $300,000. If the equipment is purchased, the following earnings before depreciation and taxes will be generated for the next six years. Use Table 12-12 Use Appendix for an approximate answer but calculate your final answer using the formula and financial calculator methods. Earnings before Depreciation Year 1 $ 82.000 Year 2 110,000 Year 3 80,000 Year 4 51,000 Year 5 45,000 Year 6...
Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one...
Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five- year period. His annual pay raises are determined by his division's return on investment (ROI), which has exceeded 22% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product B $ 370,000 $ 570,000 Initial investment: Cost of equipment (zero salvage value) Annual revenues and...
information is in order last two screen shots are appendix. Hercules Exercise Equipment Co. purchased a...
information is in order last two screen shots are appendix.
Hercules Exercise Equipment Co. purchased a computerized measuring device two years ago for $96,000. The equipment falls into the five- year category for MACRS depreciation and can currently be sold for $43,800. A new piece of equipment will cost $320,000. It also falls into the five-year category for MACRS depreciation. Assume the new equipment would provide the following stream of added cost savings for the next six years. Use Table...
1 Appendix B Present value of $1. PVF PV=FV Percent Period 1% 5% 8% 9% 12% 1 2. 3 0.893 0.797 012 4 6 7 8 9 10 .............. 11 12 0.990 0.980 0.971 0.961 0.951 0.942 0.933 0.923 0.914 0.905 0.896 0.887 0.879 0.870 0.861 0.853 0.844 0.836 0.828 0.820 0.780 0.742 0.672 0.608 2% 0.980 0.961 0.942 0.924 0.906 0.888 0.871 0.853 0.837 0.820 0.804 0.788 0.773 0.758 0.743 0.728 0.714 0.700 0.686 0.673 0.610 0.552 0.453 0.372...
1 Appendix B Present value of $1. PVF PV=FV Percent Period 1% 5% 8% 9% 12% 1 2. 3 0.893 0.797 012 4 6 7 8 9 10 .............. 11 12 0.990 0.980 0.971 0.961 0.951 0.942 0.933 0.923 0.914 0.905 0.896 0.887 0.879 0.870 0.861 0.853 0.844 0.836 0.828 0.820 0.780 0.742 0.672 0.608 2% 0.980 0.961 0.942 0.924 0.906 0.888 0.871 0.853 0.837 0.820 0.804 0.788 0.773 0.758 0.743 0.728 0.714 0.700 0.686 0.673 0.610 0.552 0.453 0.372...
You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 13 percent. Use Appendix B:for an approximate answer but calculate your final answer using the formula and financial calculator methods. Project X (Videotapes of the Weather Report) ($18,000 Investment) Year Cash Flow $ 9,000 7,000 8,000 7,600 Project Y (Slow-Motion Replays of Commercials) ($38,000 Investment) Year Cash Flow $ 19,000 12,000 13,000 15,000 WN a. Calculate the profitability index for project X....
Cascade Mining Company expects its earnings and dividends to
increase by 8 percent per year over the next 6 years and then to
remain relatively constant thereafter. The firm currently (that is,
as of year 0) pays a dividend of $4.5 per share. Determine the
value of a share of Cascade stock to an investor with a 11 percent
required rate of return. Use Table II to answer the question. Round
your answer to the nearest cent.
TABLE II Present...
You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 12 percent. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Protect X (Videotapes of the Weather Report) ($ 36,000 Investment) Year Cash Flow $18,000 16,000 17,000 16,600 Project Y (Slow-Motion Replays of Commercials) ($56.000 Investment) Year Cash Flow $ 28,000 21.000 22.000 24,000 a. Calculate the profitability index for project X....
Keller Construction is
considering two new investments. Project E calls for the purchase
of earthmoving equipment. Project H represents an investment in a
hydraulic lift. Keller wishes to use a net present value profile in
comparing the projects. The investment and cash flow patterns are
as follows: Use Appendix B for an approximate answer but calculate
your final answer using the formula and financial calculator
methods.
Project E
Project H
($40,000 Investment)
($36,000 Investment)
Year
Cash Flow
Year
Cash Flow...
X-treme Vitamin Company is considering two investments, both of which cost $20,000. The cash flows are as follows: Year Project A Project B $23,000 $20,000 2 10,000 9,000 3 10,000 15,000 1 Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a-1. Calculate the payback period for Project A and Project B. (Round your answers to 2 decimal places.) Project A Project B Payback Period year(s) year(s) b-1. Calculate the...
Oregon Forest Products will acquire new equipment that falls under the five-year MACRS category. The cost is $300,000. If the equipment is purchased, the following earnings before depreciation and taxes will be generated for the next six years. Use Table 12-12 Use Appendix for an approximate answer but calculate your final answer using the formula and financial calculator methods. Earnings before Depreciation Year 1 $ 82.000 Year 2 110,000 Year 3 80,000 Year 4 51,000 Year 5 45,000 Year 6...
Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five- year period. His annual pay raises are determined by his division's return on investment (ROI), which has exceeded 22% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product B $ 370,000 $ 570,000 Initial investment: Cost of equipment (zero salvage value) Annual revenues and...
information is in order last two screen shots are appendix.
Hercules Exercise Equipment Co. purchased a computerized measuring device two years ago for $96,000. The equipment falls into the five- year category for MACRS depreciation and can currently be sold for $43,800. A new piece of equipment will cost $320,000. It also falls into the five-year category for MACRS depreciation. Assume the new equipment would provide the following stream of added cost savings for the next six years. Use Table...
Most questions answered within 3 hours.
-
Two stationary positive point charges, charge 1 of
magnitude 3.70 nC and charge 2 of magnitude...
asked 17 minutes ago -
Variability is found in every production operation, but most
variability is cause by tolerating waste or...
asked 17 minutes ago -
Which of the following is the best description
of what a p-value above 0.05 tells you?...
asked 22 minutes ago -
2. (CPA) Which of the following is generally not subject to
federal income tax?
a. cash...
asked 31 minutes ago -
The combustion of 0.560 g of benzoic acid (ΔHcomb = 3,228
kJ/mol; MW = 122.12 g/mol)...
asked 33 minutes ago -
Microsoft Excel Question
Which of the following 4 options is the correct answer for this
question...
asked 35 minutes ago -
Horatio pushes a box of machine parts 4 meters across the
factory floor. If he pushes...
asked 51 minutes ago -
2. The exponential distribution with rate λ = 0.25.
What is the expected value X ∼...
asked 56 minutes ago -
An experimenter flips a coin 100 times and gets 52 heads. Find
the 89% confidence interval...
asked 59 minutes ago -
PLEASE UPLOAD or Write a simple pesudo code and java code for
this program with comments...
asked 1 hour ago -
Our economic and social existence is shaped by government
regulations. Think of a specific example where...
asked 1 hour ago -
You are interested in a new treatment for inflammation, as
measured by C-reactive protein (hs-CRP). You...
asked 1 hour ago