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Consider the following project's after-tax cash flow in today's dollars: Year 0 1 2 3 Cash...
Consider the following project's after-tax cash flow and the expected annual general inflation rate during the...
Consider the following project's after-tax cash flow and the expected annual general inflation rate during the project period. End of Year General Inflation Rate Expected Cash Flow (in Actual S) -S54,000 $44,000 $44,000 $44,000 3.8% 4.4 5.9 (a) Determine the average annual general inflation rate over the project period. The average annual general inflation rate is 4.71 % (Round to two decimal places.) (b) Convert the cash flows in actual dollars into equivalent constant dollars with the base year 0....
msider the following project's after-tax cash flow and the expected annual general inflation rate during the...
msider the following project's after-tax cash flow and the expected annual general inflation rate during the project period. General Inflation Rate O Expected Cash Flow End of Year EX (in Actual $) - $40,000 $27,000 $27,000 $27,000 3.3% 4.1 WN 5.1 (a) Determine the average annual general inflation rate over the project period. The average annual general inflation rate is 1%. (Round to two decimal places.) (b) Convert the cash flows in actual dollars into equivalent constant dollars with the...
Question 4 (20%) A company is considering launching a new product, below is the after-tax cash...
Question 4 (20%) A company is considering launching a new product, below is the after-tax cash flow for the new product project accounting for initial investment, expected sales and the year-by-year inflation rate: Year Expected annual inflation 2 Cash flow in Constant Dollars -$150,000 $33,000 $45,000 $55,000 $45,000 $41,000 3 1.9% 3.0% 2.7% 2.3% 2.1% a) Convert the cash flows from constant dollars (in the value of year 0) into equivalent current dollars with the base year being the present....
Consider the figures below, where the cash flow in constant (real) dollars (b) is to be...
Consider the figures below, where the cash flow in constant (real) dollars (b) is to be converted to actual dollars (a), at annual general inflation rate of 4% and market interest rate of 16%. What is the amount X in today's dollars that is equivalent to A = $1,000 in actual or future dollars? (a) Actual dollars (b) Constant (Today's) $ 1 2 3 1 23 O A. $ 912 OB. $ 1,037 O C. $ 951 OD. $ 854
PLEASE WRITE OUT WHAT FORMULAS YOU USE 7. a. Given the cash flows in actual dollars...
PLEASE WRITE OUT WHAT FORMULAS YOU USE
7. a. Given the cash flows in actual dollars provided in the following table, convert the cash flows to equivalent cash flows in constant dollars if the base year is time 0. Assume that the market interest rate is 16% and the general inflation rate is at 4% each year. Cash Flow (in Actual Dollars) $20,500 $41,500 $36,500 $55,500 4 Calculate the present worth value of both (actual and constant $) cashflows within...
a) Determine the after-tax cash flows from year 0 - year 2 b) Determine the present worth of the project c) Determine t...
a) Determine the after-tax cash flows from year 0 - year 2
b) Determine the present worth of the project
c) Determine the IRR of the project
10.43 Gentry Machines, Inc., has just received a special job order from one of its clients. The following financial data on the order have been collected: • This two-year project requires the purchase of a special-purpose piece of equipment for $55,000. The equipment falls into the MACRS five-year class. . The machine will...
1) (12 pts) The following is a cash flow diagram: Cash Flows: 20000 10000 Cash Flow...
1) (12 pts) The following is a cash flow diagram: Cash Flows: 20000 10000 Cash Flow $35,000 $5,000 $7,500 $1000 $10,000 $5,000 Year 0 1 2 4 >-10000 -20000 30000 40000 Years 4 Annual Interest rate = 10%, compounded annually a) Calculate the Present wortlh b) Calculate the equivalent annuity for these cash flows c) Calculate the future worth of these cash flows at 5 years
3. Consider Table 2 Table 2 Year 3 Year 4 Cash flow Year 2 Year 0 Year 1 Cash flovw Cash flow Cash flow 70 Cash flow Pr...
3. Consider Table 2 Table 2 Year 3 Year 4 Cash flow Year 2 Year 0 Year 1 Cash flovw Cash flow Cash flow 70 Cash flow Project 80 70 30 -150 0.24 Interest Tax Shield 0.75 (a)Consider Table 2. Calculate the net present value of the project assuming it is all-equity financed. The required return on unlevered equity is 15%. (b)Consider Table 2. Assume for now that the project is financed using equal parts debt and equity. The cost...
Calculate the payback period for the following set of cash flows: Year Cash Flow -240,000 60,000...
Calculate the payback period for the following set of cash flows: Year Cash Flow -240,000 60,000 25,000 30,000 35,000 5 35,000 40,000 60,000 What is the project's payback period? Round your answer to two decimals. Answer:
5 Consider the investment project with the following net cash flows: Year Net Cash Flow 0...
5 Consider the investment project with the following net cash flows: Year Net Cash Flow 0 $1,500 SX $650 SX What would be the value of X if the project's IRR is known to be 10%? The annual income from a rented house is $24,000. The annual expenses are $6000. If the house can be sold for $245,000 at the end of 10 years, how much could you afford to pay for it now, if you considered 900 to be...
Consider the following project's after-tax cash flow and the expected annual general inflation rate during the project period. End of Year General Inflation Rate Expected Cash Flow (in Actual S) -S54,000 $44,000 $44,000 $44,000 3.8% 4.4 5.9 (a) Determine the average annual general inflation rate over the project period. The average annual general inflation rate is 4.71 % (Round to two decimal places.) (b) Convert the cash flows in actual dollars into equivalent constant dollars with the base year 0....
msider the following project's after-tax cash flow and the expected annual general inflation rate during the project period. General Inflation Rate O Expected Cash Flow End of Year EX (in Actual $) - $40,000 $27,000 $27,000 $27,000 3.3% 4.1 WN 5.1 (a) Determine the average annual general inflation rate over the project period. The average annual general inflation rate is 1%. (Round to two decimal places.) (b) Convert the cash flows in actual dollars into equivalent constant dollars with the...
Question 4 (20%) A company is considering launching a new product, below is the after-tax cash flow for the new product project accounting for initial investment, expected sales and the year-by-year inflation rate: Year Expected annual inflation 2 Cash flow in Constant Dollars -$150,000 $33,000 $45,000 $55,000 $45,000 $41,000 3 1.9% 3.0% 2.7% 2.3% 2.1% a) Convert the cash flows from constant dollars (in the value of year 0) into equivalent current dollars with the base year being the present....
Consider the figures below, where the cash flow in constant (real) dollars (b) is to be converted to actual dollars (a), at annual general inflation rate of 4% and market interest rate of 16%. What is the amount X in today's dollars that is equivalent to A = $1,000 in actual or future dollars? (a) Actual dollars (b) Constant (Today's) $ 1 2 3 1 23 O A. $ 912 OB. $ 1,037 O C. $ 951 OD. $ 854
PLEASE WRITE OUT WHAT FORMULAS YOU USE
7. a. Given the cash flows in actual dollars provided in the following table, convert the cash flows to equivalent cash flows in constant dollars if the base year is time 0. Assume that the market interest rate is 16% and the general inflation rate is at 4% each year. Cash Flow (in Actual Dollars) $20,500 $41,500 $36,500 $55,500 4 Calculate the present worth value of both (actual and constant $) cashflows within...
a) Determine the after-tax cash flows from year 0 - year 2
b) Determine the present worth of the project
c) Determine the IRR of the project
10.43 Gentry Machines, Inc., has just received a special job order from one of its clients. The following financial data on the order have been collected: • This two-year project requires the purchase of a special-purpose piece of equipment for $55,000. The equipment falls into the MACRS five-year class. . The machine will...
1) (12 pts) The following is a cash flow diagram: Cash Flows: 20000 10000 Cash Flow $35,000 $5,000 $7,500 $1000 $10,000 $5,000 Year 0 1 2 4 >-10000 -20000 30000 40000 Years 4 Annual Interest rate = 10%, compounded annually a) Calculate the Present wortlh b) Calculate the equivalent annuity for these cash flows c) Calculate the future worth of these cash flows at 5 years
3. Consider Table 2 Table 2 Year 3 Year 4 Cash flow Year 2 Year 0 Year 1 Cash flovw Cash flow Cash flow 70 Cash flow Project 80 70 30 -150 0.24 Interest Tax Shield 0.75 (a)Consider Table 2. Calculate the net present value of the project assuming it is all-equity financed. The required return on unlevered equity is 15%. (b)Consider Table 2. Assume for now that the project is financed using equal parts debt and equity. The cost...
Calculate the payback period for the following set of cash flows: Year Cash Flow -240,000 60,000 25,000 30,000 35,000 5 35,000 40,000 60,000 What is the project's payback period? Round your answer to two decimals. Answer:
5 Consider the investment project with the following net cash flows: Year Net Cash Flow 0 $1,500 SX $650 SX What would be the value of X if the project's IRR is known to be 10%? The annual income from a rented house is $24,000. The annual expenses are $6000. If the house can be sold for $245,000 at the end of 10 years, how much could you afford to pay for it now, if you considered 900 to be...
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