YEAR Sales Cost of Goods S&A Depreciation Investment in NWC Investment in Gross PPE 0 1,130.00 105,468.00 1 2 21,093.60 21,093.60 549.00 3 132,716.00 132,716.00 132,716.00 132,716.00 62,780.00 62,780.00 62,780.00 62,780.00 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 21,093.60 21,093.60 549.00 549.00 4 132,716.00 62,780.00 549.00 21,093.60 549.00 The firm has a capital structure of 37.00% debt and 63.00% equity. The cost of debt is 9.00%, while the cost of equity is estimated at 15.00 %. The tax rate facing the firm is 38.00%. (Assume that you can't recover the final NWC position in year 5. i.e. only consider the change in NWC for each year)
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- A firm has projected the following financials for a possible project: YEAR Sales Cost of Goods S&A Depreciation Investment in NWC Investment in Gross PPE 0 1,163.00 104,285.00 1 125,285.00 2 62,893.00 62,893.00 20,857.00 125,285.00 30,000.00 30,000.00 526.00 526.00 3 125,285.00 4 125,285.00 30,000.00 30,000.00 20,857.00 20,857.00 20,857.00 What is the NPV of the project? (Hint: Be careful about rounding the WACC here!) 62,893.00 62,893.00 62,893.00 526.00 5 526.00 125,285.00 30,000.00 20,857.00 526.00 The firm has a capital structure of 46.00% debt and 54.00% equity. The cost of debt is 10.00%, while the cost of equity is estimated at 13.00%. The tax rate facing the firm is 38.00%. (Assume that you can't recover the final NWC position in year 5. i.e. only consider the change in NWC for each year)Question The following economical indictors are referring to types of project (A and B). Answer the following points according to these given indictors in the tables. project A:r=8% project B: r=8% year cash flow (CF) year cash flow (CF) 0 -598 0 -384 1 110 1 105 2 170 2 105 3 210 3 95 4 320 4 118 A) If you are aware that( r%) percentages are various for different reasons to be (10% and 20%). So determine level of NPV during your analysis procedures for whole the mentioned cases of (% r) for each project? B) Which one of the mentioned project are more economically by using concept of IRR and take the range of (% r) between (9% to %25) for supporting your answers? C) Drawing out all the levels of various of the project for each cases of (r %) which given initially in point (A) above. D) Give clear justification about any of the above project more feasible?Projection of yearl cashflow Year Cashflow($) 0 (239000.00) 1 3789.00 2 47675.00 3 122097.00 4 407968.00 5 453324.00 Given that the discount rate is 10% What is the projects discounted payback period? Calculate for Net Present Value? Calculate Internal Rate of Return?
- Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 −$29,000 −$29000 1 14,400 4,300 2 12,300 9,800 3 9,200 15,200 4 5,100 16,800 a) What is the Internal Rate of Return (IRR) for each of these projects? b) Using the IRR decision rule, which project should the company accept? c) If the required return is 11 percent, what is the Net Present Value (NV) for each of these projects? d) Using the NPV decision rule, which project should the company accept? e) Why do you think the NPV and IRR rules do not agree on same project approval/rejection direction?Assume a project has cash flows of -$54,300, $18,200, $37,300, and $14,300 for Years 0 to 3, respectively. What is the profitability index given a required return of 12.6 percent? 1.02 .95 .98 1.06 ☐ 1.00A firm whose cost of capital is 10% is considering two mutuallyexclusive projects A and B, the cash flows of which are as below: YearProject AProject B7050.00080.000162,50096.170Suggest which project should be taken up using (i) net present
- 17. Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B)0 −$291,000 −$41,6001 37,000 20,0002 55,000 17,6003 55,000 17,2004 366,000 14,000 a) What is the Internal Rate of Return (IRR) for each of these projects? b) Using the IRR decision rule, which project should the company accept? c) If the required return is 11 percent, what is the Net Present Value (NV) for each of these projects? d) Using the NPV decision rule, which project should the company accept? e) Why do you think the NPV and IRR rules do not agree on same project approval/rejection direction?Calculate the EAR of the following investment, entered as a percentage (Example: if your answer is 0.145, enter 14.5) Year Number Cashflow 0 -11400 1 3500 2 3000 3 3100 4 2800 Your Answer:gnment (II) Saved Fox Co. has identified an investment project with the following cash flows. Year Cash Flow $1,290 1,240 1,590 2. 3 1,950 a. If the discount rate is 9 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the present value at 17 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the present value at 23 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Present value at 9 percent b. Present value at 17 percent C. Present value at 23 percent re to search
- 1. Consider the following investment projects: Year(n) Net cash flow Project 1 -$1,200 Project 2 -$2,000 1 600 1,500 2 1,000 1,500 IRR 19.65% 17.53% Determine the range of MARR for which Project 2 would be preferred over Project 1Foster Manufacturing is analyzing a capital investment project that is forecasted to produce the following cash flows and net income: After-Tax Cash Flows $(20,000) Net Income Year 1 6,000 2,000 6,000 8,000 2,000 3 2,000 8,000 2,000 Using the present value tables provided in Appendix A, the internal rate of return (rounded to the nearest whole percentage) is: а. 5%. b. 12%. C 14%. d. 40%.Q7 - Consider the following project: Year Cash Flow 0 – $ 3,024 1 17,172 2 – 36,420 3 34,200 4 – 12,000 a) Determine the IRR (s) for this project. b) At which rates of return will the project be acceptable?