6) Twitter is considering purchasing a new Al computer to manage its platform. This computer would cost $74,250 and generate cash flows according to the following table over the next 5 years. Its has an IRR of 12% and Twitter has a WACC of 8%. Period Cash Flows 0 $-74,250 1 $15,000 2 $17,000 3 $21,000 4 $25,000 5 $29,000 a) If you use the reinvestment assumption from the NPV method, what would be the total value of these inflows at the end of the 5 year period? b) If the reinvestment assumption from the IRR method is used, what would be the total value of these inflows at the end of the 5 year period? c) Which assumption is more plausible?
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- Imagineering, Inc., is considering an investment in CAD-CAM compatible design software with the cash flow profile shown in the table below. Imagineering’s MARR is 17 %/year. End of Year Cash Flow (M$) 0 -$12 1 -$1 2 $5 3 $2 4 $5 5 $5 6 $2 7 $5 What is the future worth of this investment?PayPal is considering an update to its app. The update would cost 10 million dollars today, and 6 million dollars 1 year from now. In years 2-6, the update would increase PayPal's cash flows by 6 million dollars. What is the IRR of this project? expert.chegg.comImagineering, Inc., is considering an investment in CAD-CAM compatible design software with the cash flow profile shown in the table below. Imagineering’s MARR is 21 %/year. End of Year Cash Flow (M$) 0 -$12 1 -$1 2 $5 3 $2 4 $5 5 $5 6 $2 7 $5 What is the future worth of this investment? $Carry all interim calculations to 5 decimal places and then round your final answer to 2 decimal places (in millions of dollars). The tolerance is ±0.2.
- Your venture has signed a new consulting contract that will require you to invest in new analytical software and a new computer. The contract will generate the following periodic cash flows. You have used bank credit to finance the cost of the software and hardware. The financing rate is 6%. Cash flows generated from the project will be reinvested at 4%. The MIRR of the project is between 6% and 7%. time cash flow 0 -$200,000 1 $20,000 2 $30,000 3 $50,000 4 $65,000 5 $80,000 True FalseThe Pan American Bottling Company is considering the purchase of a new machine that would increase the speed of bottling and save money. The net cost of this machine is $69,000. The annual cash flows have the following projections. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year 1 2 3 4 5 Cash Flow $ 29,000 29,000 29,000 34,000 20,000 a. If the cost of capital is 13 percent, what is the net present value of selecting a new machine? Note: Do not round intermediate calculations and round your final answer to 2 decimal places. Net present value b. What is the internal rate of return? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Internal rate of return c. Should the project be accepted? O Yes O No %Help finish the next exercise: A delivery company is evaluating an investment to purchase vehicles. This is expected to generate a return of $9988.00 one year from now, $16,230.00 two years from now, and $21,107.00 three years from now. The required rate of return is 10%. Calculate the discounted cash flow. We already know that: • The Present Value of the Cash Flow 2 is $13,413.22 and, • The Present Value of the Cash Flow 3 is $15,858.00 Find the Present Value of the Cash Flow 1 and, using this and the previous information, calculate the discounted cash flow. Note: Write you answer rounded to two decimal places. Type just the number, do not type the $ sign. For example, if your answer is $25,500.55 type only: 25500.55
- Imagineering, Inc., is considering an investment in CAD-CAM compatible design software with the cash flow profile shown in the table below. Imagineering’s MARR is 18 %/year. EOY Cash Flow 0 -$12,000,000 1 -$1,000,000 2 $5,000,000 3 $2,000,000 4 $5,000,000 5 $5,000,000 6 $2,000,000 7 $5,000,000 What is the annual worth of this investment?The Pan American Bottling Company is considering the purchase of a new machine that would increase the speed of bottling and save money. The net cost of this machine is $57,000. The annual cash flows have the following projections. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year 1 2 3 4 5 Cash Flow $ 22,000 24,000 26,000 32,000 14,000 a. If the cost of capital is 11 percent, what is the net present value of selecting a new machine? Note: Do not round intermediate calculations and round your final answer to 2 decimal places. Net present value b. What is the internal rate of return? Note: Do not round intermediate calculations, Enter your answer as a percent rounded to 2 decimal places. Intemal rate of return %Help finish the next exercise: A delivery company is evaluating an investment to purchase vehicles. This is expected to generate a return of $11391.00 one year from now, $16.230 00 two years from now and $21,107.00 three years from now. The required rate of return is 10%. Calculate the discounted cash flow We already know that: • The Present Value of the Cash Flow 2 is $13.413.22 and, The Present Value of the Cash Flow 3 is $15,858.00 Find the Present Value of the Cash Flow 1 and, uning this and the previous information, calculate the discounted cash flow. Note: Write you answer rounded to two decimal places Type just the number, do not type tihe S sign. For example, if your anower is $25,500.55 type only 2550.55 Answer
- If a copy center is considering the purchase of a new copy machine with an initial investment cost of $150,000 and the center expects an annual net cash flow of $20,000 per year, what is the payback period?The management of Ryland International Is considering Investing in a new facility and the following cash flows are expected to result from the investment: A. What Is the payback period of this uneven cash flow? B. Does your answer change if year 6s cash inflow changes to $920,000?A process engineer plans on investing $5,000.00 now so that they may withdraw $500.00 a year for 12 years and still have $1,000.00 left in the account at the end of 12 years. a) Sketch the Cash Flow diagram. b) Write the equation for Present Worth of the cash flows in terms of the unknown rate of return. c) Calculate the rate of return on this investment using net present worth analysis techniques. (Hint: use linear interpolation).