1 Exercise 14A-4 (Algo) Basic Present Value Concepts [LO14-7]Fraser Company will need a new $410,000 warehouse in nine years.Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s)using tables.Required:What lump-sum amount should the company invest now to have $410,000 available at the endof nine-years? Assume the company can invest money at:Note: Round your final answer to the nearest whole dollar amount.1. Eight percent2. Thirteen percentPresent Value

Time value of money states that the value of money decreases over time.The present value of a future…

Answered: Exercise 14A-4 (Algo) Basic Present…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

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Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money

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Problem 9.13E

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Exercise 14A-4 (Algo) Basic Present Value Concepts [LO14-7] Fraser Company will need a new warehouse in eighteen years. The warehouse will cost $410,000 to build. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: What lump-sum amount should the company invest now to have the $410,000 available at the end of the eighteen-year period? Assume that the company can invest money at: (Round your final answer to the nearest whole dollar amount.)
19 es TB MC Qu. 14-36 (Algo) Moates Corporation has... Moates Corporation has provided the following data concerning an investment project that it is considering: $ 190,000 $ 120,000 per year 4 years 9% Initial investment Annual cash flow Expected life of the project Discount rate Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the project is closest to: Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Multiple Choice $190,000 $198,680 $(70,000)
Project B cost $5,000 and will generate after-tax net cash inflows of $500 in year one, $1,200 in year two, $2,000 in year three. $2,500 in year four, and $2,000 in year five. What is the NPV using 8% as the discount rate? For further instructions on net present value in Excel, see Appendix C.
Problem 2 ABM Enterprise would like to evaluate/analyze an investment proposal. Given the following: Investment amount 450,000 (2022) Dividends / Revenue stream - 100,000 for the first year and an interval of 5,000 for the succeeding years Discount rate - 14% a. NPV for the perio 2023 through 2029; b. Total NPV using manual computation; c. Total NPV using the Excel function; and d. IRR rate.
Refer to the data provided below for Proposal A Proposal AInitial investment $100,000Cash flow from operations Year 1 60,000Year 2 40,000Year 3 35,000Disinvestment -Life (years) 3Discount rate (for all proposals) 12% Compute the net present value for Proposal A ( for all 3 years) and consider this the likely scenario. Note: Round your answers to the nearest whole dollar. Use a negative sign to indicate a cash outflow.
ос What is the profitability index of a project that costs $8,000 and provides cash flows of $2,100 in years 1 and 2 and $4,100 in year and 4? The discount rate is 10%. Note: Do not round intermediate calculations. Round your answer to 4 decimal places. Answer is complete but not entirely correct. Profitability index 1.1907x
Present value comparisons of single amounts In exchange for a $20,000 payment today, a well-known company will allow you to choose one of the alternatives shown in the following table. Your opportunity cost is 11%. Alternative Single amount A $28,500 at end of 3 years B $54,000 at end of 9 years C $160,000 at end of 20 years Find the Present value of each alternative. Are all the alternatives acceptable? Which alternative, if any, will you take?
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%. Required: 1. Compute the net present value of Project A. 2. Compute the net present value of Project B. 3. Which investment alternative (if either) would you recommend that the company accept?
Net Present Value Versus Internal Rate of Return for discount factors use Exhibit 128-1 and Exhibit 128-2. Skiba Company is thinking about two different modifications to its cument manufacturing process. The after-tax cash flows associated with the two investments follow Year D 1 2 Project I $(100,000) Project 1 Project II 134,560 Skiba's cost of capital is 10%. Required: 1. Compute the NPV and the IRR for each investment. Round present value calculations and your final NPV answers to the nearest dollar. Round IRR answers to the nearest whole percent. Project II $(100,000) 63,857 63,857 NPV IRR
Consider a project with the following information: Year 1 2 3 4 5 6 Initial outlay= $950,000 Compute the NPV if the company's discount rate is 10%. 1) $268,244 2) $201,650 3) $213,050 $129 After-tax cash flows $300,000 $400,000 $400,000 $200,000 $150,000 $150,000
B. Problem: A company is considering two projects. The discount rate is 10 percent, and the projects' cash flows would be: Years 1 3 Project A -S700 S500 $300 S100 Project B -S700 s100 S300 S600 a. Calculate the projects' NPVS and IRRS. b. If the two projects are independent, which project(s) should be chosen? c. If the two projects are mutually exchusive, which project should be chosen?
Part II - Average Rate of Return (Ch 26) The management of River Corporation is considering the purchase of a new machine costing $380,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Year 1 2 3 4 5 Income from Operations $20,000 $20,000 $20,000 $20,000 $20,000 Net Cash Flow $95,000 $95,000 $95.000 $95,000 $95,000 What is the average rate of return for this investment? Please show your work.

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