ZuoTi.Pro
Question

software company is evaluating the following projects with estimated cash flow (in $): Year (t) Project...

software company is evaluating the following projects with estimated cash flow (in $):

Year (t)

Project A

Project B

Project C

0

-100,000

-100,000

-120,000

1

30,000

30,000

40,000

2

40,000

30,000

40,000

3

40,000

30,000

40,000

4

40,000

30,000

40,000

5

100,000

130,000

120,000


Calculate the net profit, payback period, return on investment (ROI), and net present value (NPV) of all projects.

Discount rate= 3.00%

a) Show your calculated discount rate and fill in the table.

Project A

Project B

Project C

Net Profit

Payback Period

ROI

NPV

b) Based on your financial evaluation in question a), recommend which of the above three projects the company should accept, and explain your decision.

engineering   Computer-Science   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

0 0
Add a comment
Know the answer?
Add Answer to:
software company is evaluating the following projects with estimated cash flow (in $): Year (t) Project...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Marks = 30) Year 1 Year 2 evaluating the following two projects. The cost of SARBELLE...

    Marks = 30) Year 1 Year 2 evaluating the following two projects. The cost of SARBELLE LADIES CLUB Company has the chance to open a third brunch. There we toute Project A is AED 550.000, for Project B is AED 350,000. The cost of capital is 10%. Project A Year 3 120,000 Year 4 130,000 Year 5 Project B 145.000 100,000 150.000 165.000 110,000 120,000 140.000 150,000 1) Calculate the net present value (NPV) of the two projects, A and...

  • JC Warehouse Corporation has estimated the cash flows of Projects A, B, and C as follows.

    JC Warehouse Corporation has estimated the cash flows of Projects A, B, and C as follows.  YearProject AlphaProject BetaProject Delta0-$100,000-$200,000-$100,000170,000130,00075,000270,000130,00060,000 Suppose the company requires a 12 percent return on investment.1.1 Calculate the payback period for each of the three projects.1.2 Calculate the NPV for each of the three projects.1.3 Calculate the profitability index for each of the three projects.1.4 Suppose these three projects are independent and the company has an unlimited amount of funds. If the company makes decision based...

  • (b) A company is evaluating a project for which the costs and expected cash flows are...

    (b) A company is evaluating a project for which the costs and expected cash flows are as follows: Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 -$2,200,000 $400,000 $535,000 $650,000 $700,000 $880,000 The company uses a discount rate of 10% for all projects. Given the information: i. Determine NPV of the project. (2 marks) Determine payback period of the project. (1.5 marks) Determine discounted payback period of the project. (2 marks) iv. Will the payback period...

  • Question 1 (evaluating investment projects) Generic Motors Corporation is planning to invest $100,000 in year zero...

    Question 1 (evaluating investment projects) Generic Motors Corporation is planning to invest $100,000 in year zero (today) in new equipment. This investment is expected to generate net cash flows of $40,000 a year for the next 4 years (years 1-4). The salvage value after 4 years is zero. The discount rate (cost of capital) is 20% a year. Required: a) What is the net present value (NPV) of this project? NPV = $ Should the firm invest, based on NPV?...

  • (Discounted payback period) Gio's Restaurants is considering a project with the following expected cash flows: Year...

    (Discounted payback period) Gio's Restaurants is considering a project with the following expected cash flows: Year Project Cash Flow (millions) $(210) AWNO If the project's appropriate discount rate is 11 percent, what is the project's discounted payback period? The project's discounted payback period is years. (Round to two decimal places.) (Mutually exclusive projects and NPV) You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows: Project A Project B Year Cash Flow...

  • Maxwell Software, Inc., has the following mutually exclusive projects. Year Project A -$22,000 13,000 9,500 3,100...

    Maxwell Software, Inc., has the following mutually exclusive projects. Year Project A -$22,000 13,000 9,500 3,100 Project B -$25,000 14,000 10,500 9,500 نادية a-1. Calculate the payback period for each project. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Payback period years Project A Project B years a-2. Which, if either, of these projects should be chosen? O Project A O Project B Both projects Neither project b-1. What is the NPV for...

  • Consider four projects, which you expect to generate the following cash flows: Year                      Project A      &nbs

    Consider four projects, which you expect to generate the following cash flows: Year                      Project A        Project B                Project C                Project D 0                         (200,000)               (2,000)                 (200,000)               (200,000) 1                          210,000                 18,000                  100,000                   90,000 2                      (100,000 is for project c & d ONLY)    100,000                100,000 3                                                                                      100,000                115,000 , Your required return on all of the investments is 8%. For each project estimate the Payback Period, Internal Rate...

  •       5.   Find the NPV, IRR, MIRR and Payback for the following projects; use a WACC...

          5.   Find the NPV, IRR, MIRR and Payback for the following projects; use a WACC of 10%. Year Project A Project B 0 -$130,000 -$130,000 1 $60,000 $35,000 2 $40,000 $40,000 3 $40,000 $45,000 4 $25,000 $70,000                                                                                           Project A Project B NPV IRR MIRR Payback Period               If projects A & B are mutually exclusive, which would you recommend be accepted? ___________________

  • (18 points) Neil Corporation has two projects under consideration. The cash flows for each project are...

    (18 points) Neil Corporation has two projects under consideration. The cash flows for each project are shown in the following table. The firm has a 16% discount rate. Year Initial Investment (CF) Project A $40,000 $13,000 13,000 13,000 Project B $30,000 $19,000 16,000 13,000 a. Determine the payback period for project A. b. Determine the payback period for project B. c. Calculate the NPV for project A. d. Calculate the NPV for project B. e. Determine the discounted payback period...

  • CAPITAL BUDGETING CRITERIA A firm with a 14% WACC is evaluating two projects for this year's...

    CAPITAL BUDGETING CRITERIA A firm with a 14% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: 0 1 2 5 Project M Project N - $30,000 $10,000 $10,000 $10,000 $10,000 $10,000 $90,000 $28,000 $28,000 $28,000 $28,000 $28,000 a. Calculate NPV for each project. Round your answers to the nearest cent. Do not round your intermediate calculations. Project M $ Project N $ Calculate IRR for each project. Round your answers...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT