microeconomics: firm choice : one out of three project. Project A; cash flow: period 1 =...
microeconomics:
firm choice : one out of three project. Project A; cash flow: period 1 = 500, period 2 = 1000, period 3 = 10 000. Project B; cash flow: 1 = 1000, 2 = 1000, 3 = 0. Project C; cash flow: 1 = 0, 2 = 2000, 3 = 0. Each project pay for extra 2000, at time 0 (at the beginning of period 0). Choice is based on pay-off period-method. Accept project which cash flow of two first periods covers up the hole project costs, where does it lead ? What if choice is based on net present value with interest rate 10%. step by step solution please.
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microeconomics: firm choice : one out of three project. Project A; cash flow: period 1 =...
Cash Flow E F Cost 44000 105000 Cash flow year 1 9778 42000 Cash flow year...
Cash Flow E F Cost 44000 105000 Cash flow year 1 9778 42000 Cash flow year 2 9778 31500 Cash flow year 3 9778 21000 Cash flow year 4 9778 10500 Cash flow year 5 9778 0 Cash flow year 6 9778 0 Payback period. What are the payback periods of projects E and F in the following table: Assume all the cash flow is evenly spread throughout the year. If the cutoff period is 3 years, whichproject(s) do you...
(Numbers in parentheses are negative) These two projects are independent. Year Cash Flow of A Cash...
(Numbers in parentheses are negative) These two projects are independent. Year Cash Flow of A Cash Flow of B 0 ($5000) ($2000) 1 $1000 $1000 2 $2000 $1000 3 $2000 $2000 4 $2000 $1000 5 $1000 ($1000) Based on the firms' NPV profiles which project should be taken if the required rate of return is 9.5%? Project B because it will raise the value of the firm by the greatest amount based on NPV. Both projects should be taken because...
Payback period. What are the payback periods of projects E and F in the following table:93: ? Assume all the cash flow...
Payback period. What are the payback periods of projects E and F in the following table:93: ? Assume all the cash flow is evenly spread throughout the year. If the cutoff period is 3 years, which project(s) do you accept? What is the payback period for project E? Data Table years (Round to one decimal place.) (Click on the following icon in order to copy its contents into a spreadsheet.) Cash Flow Cost Cash flow year 1 Cash flow year...
7 Assume all the cash flow is evenly spread throughout the year of the cutoff period...
7 Assume all the cash flow is evenly spread throughout the year of the cutoff period is 3 years, which project(s) do you Payback period. What are the payback periods of projects and Fin the following table: accept? What is the payback period for project E? years (Round to one decimal place) 1 Data Table Click on the following icon in order to copy contents into a spreadsheet.) Cash Flow $105.000 $31.500 Cash flow year 1 Cash flow y $8.889...
UV JU Problem H Given the following cash flow for a project, answer questions 39 and...
UV JU Problem H Given the following cash flow for a project, answer questions 39 and 40. Year 10 Net cash flow 1-S 2000 $ 500 $ 1000 1 х 39. Calculate X (cash flow in year 3) assuming that the break-even interest rate is 10%? a) $ 760 b) $ 850 c) $ 957 d) $ 1270 40. Assuming that X is $1100, do you recommend the project at MARR = 10%? a) Indifferent b) No c) Yes d)...
(1) A firm is considering an expansion project that will last three years. The project requires...
(1) A firm is considering an expansion project that will last three years. The project requires an immediate purchase of a new equipment that costs $900,000. The equipment will be fully depreciated using straight-line method over the next three years. The resale price of the equipment at the end of year three is estimated to be $200,000. The project will generate annual sales of $750,000 and incur annual costs (all costs except depreciation expense) of $200,000 for each of the...
What minimum uniform period cash flow for a project in periods 2 through 9 is required...
What minimum uniform period cash flow for a project in periods 2 through 9 is required to make the discounted payback period be period 9 using an interest rate of 8.0 % if the year zero cash flow is -90,000 and the year one cash flow is -25,000?
(Numbers in parentheses are negative cash flows) These two projects are independent. Year Cash Flow of...
(Numbers in parentheses are negative cash flows) These two projects are independent. Year Cash Flow of A Cash Flow of B 0 ($5000) ($2000) 1 $1000 $1000 2 $2000 $1000 3 $2000 $2000 4 $2000 $1000 5 $1000 ($1000) What is the approximate NPV of project A if the required rate of return is 9.5%? $390 $572 $581 $1131 $3000
Suppose your firm is considering investing in a project with the cash flows shown below, that...
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 12 percent, and that the maximum allowable payback and discounted payback statistic for the project are 2 and 3 years, respectively Time Cash Flow 0 1 2 3 4 5 6 -1,150 30570770770 370770 Use the NPV decision rule to evaluate this project, should it be accepted or rejected? Multiple Choice 0...
(Numbers in parentheses are negative cash flows) These two projects are independent. Year Cash Flow of...
(Numbers in parentheses are negative cash flows) These two projects are independent. Year Cash Flow of A Cash Flow of B 0 ($5000) ($2000) $1000 $1000 2 $2000 $1000 3 $2000 $2000 4 $2000 $1000 5 $1000 ($1000) 1 What is the approximate IRR of project A if the required rate of return is 9.5%? 40.97% O 17.74% 15.84% O 14.85% O 15.34%
(Numbers in parentheses are negative) These two projects are independent. Year Cash Flow of A Cash Flow of B 0 ($5000) ($2000) 1 $1000 $1000 2 $2000 $1000 3 $2000 $2000 4 $2000 $1000 5 $1000 ($1000) Based on the firms' NPV profiles which project should be taken if the required rate of return is 9.5%? Project B because it will raise the value of the firm by the greatest amount based on NPV. Both projects should be taken because...
Payback period. What are the payback periods of projects E and F in the following table:93: ? Assume all the cash flow is evenly spread throughout the year. If the cutoff period is 3 years, which project(s) do you accept? What is the payback period for project E? Data Table years (Round to one decimal place.) (Click on the following icon in order to copy its contents into a spreadsheet.) Cash Flow Cost Cash flow year 1 Cash flow year...
7 Assume all the cash flow is evenly spread throughout the year of the cutoff period is 3 years, which project(s) do you Payback period. What are the payback periods of projects and Fin the following table: accept? What is the payback period for project E? years (Round to one decimal place) 1 Data Table Click on the following icon in order to copy contents into a spreadsheet.) Cash Flow $105.000 $31.500 Cash flow year 1 Cash flow y $8.889...
UV JU Problem H Given the following cash flow for a project, answer questions 39 and 40. Year 10 Net cash flow 1-S 2000 $ 500 $ 1000 1 х 39. Calculate X (cash flow in year 3) assuming that the break-even interest rate is 10%? a) $ 760 b) $ 850 c) $ 957 d) $ 1270 40. Assuming that X is $1100, do you recommend the project at MARR = 10%? a) Indifferent b) No c) Yes d)...
(1) A firm is considering an expansion project that will last three years. The project requires an immediate purchase of a new equipment that costs $900,000. The equipment will be fully depreciated using straight-line method over the next three years. The resale price of the equipment at the end of year three is estimated to be $200,000. The project will generate annual sales of $750,000 and incur annual costs (all costs except depreciation expense) of $200,000 for each of the...
(Numbers in parentheses are negative cash flows) These two projects are independent. Year Cash Flow of A Cash Flow of B 0 ($5000) ($2000) 1 $1000 $1000 2 $2000 $1000 3 $2000 $2000 4 $2000 $1000 5 $1000 ($1000) What is the approximate NPV of project A if the required rate of return is 9.5%? $390 $572 $581 $1131 $3000
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 12 percent, and that the maximum allowable payback and discounted payback statistic for the project are 2 and 3 years, respectively Time Cash Flow 0 1 2 3 4 5 6 -1,150 30570770770 370770 Use the NPV decision rule to evaluate this project, should it be accepted or rejected? Multiple Choice 0...
(Numbers in parentheses are negative cash flows) These two projects are independent. Year Cash Flow of A Cash Flow of B 0 ($5000) ($2000) $1000 $1000 2 $2000 $1000 3 $2000 $2000 4 $2000 $1000 5 $1000 ($1000) 1 What is the approximate IRR of project A if the required rate of return is 9.5%? 40.97% O 17.74% 15.84% O 14.85% O 15.34%
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