As a member of Apache Oil Corporation's financial staff, you must estimate the Year 1 cash flow for a proposed project with the following data. What is the Year 1 cash flow? Sales revenues, each year Depreciation Other operating costs Interest expense Tax rate O a. $16,351 O b. $17,212 O c. $18,118 O d. $19,071 O e. $20,075 $42,500 $10,000 $17,000 $4,000 35.0%
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- PROBLEM # 2 Consider the following cash flow of a company: Year Cash flow -600 10 -5000 11-40 1000 a) Compute the IRR for this table b) At MARR 15% determine the acceptability of each project.QUESTION 5 Compare the following two mutually exclusive projects on the basis of Accounting Rate of Return (ARR). Cash flows and salvage values are in thousands of ringgit. Use the straight line depreciation method. Year Cash Outflow Cash Inflow Salvage Value Year Cash Outflow Cash Inflow Salvage Value Required: 0 -250 0 -228 Project A 1 91 Project B 1 87 a. Compute ARR for Project A b. Compute ARR for Project B C. Advise Management on which project to select 2 2 130 110 3 3 105 10 84 18QUESTION 23 Reno Company is considering a project that has the following cash flow data. What is the project's IRR? Year Cash flows O a. 14.05% O b. 15.61% OC. 17.34% O d. 19.27% O e. 21.20% 0 -$1,050 1 $400 2 $400 3 $400 4 $400
- Question content area top Part 1 (IRR calculation) Determine the IRR on the following projects: a. An initial outlay of $13,000 resulting in a single free cash flow of $17,165 after 9 years b. An initial outlay of $13,000 resulting in a single free cash flow of $46,394 after 15 years c. An initial outlay of $13,000 resulting in a single free cash flow of $105,001after 25 years d. An initial outlay of $13,000 resulting in a single free cash flow of $13,653 after 4 yearsQuestion 16 of 30 View Policies Current Attempt in Progress -/0.35 ⠀ Crane Crafts Corp. management is evaluating two independent capital projects that will each cost the company $200,000. The two projects will provide the following cash flows: Year Project A Project B 1 $66,750 $26,450 2 93,450 66,125 3 34,235 143,250 4 151,655 98,110 (a1) What is the payback period of both projects? (Round answers to 2 decimal places, e.g. 15.25.) The Payback of Project A is years and Project B is eTextbook and Media Save for Later Using multiple attempts will impact your score. 20% score reduction after attempt 2 years. Attempts: 0 of 3 used Submit Answer (a2) The parts of this question must be completed in order. This part will be available when you complete the part above. Search ♡QUESTION 8 The INTERNAL RATE OF RETURN for the project shown above is: O 3.92% O 13.25 O 15.17% 9 21.22% O No IRR QUESTION 9
- Porter Company is analyzing two potential investments Initial investment Net cash flow: Year 1 Year 2 Year 3 Year 4 Project X Project Y $ 75,900 $ 64,000 26,000 26,000 26,000 4,400 28,000 28,000 20,000 If the company is using the payback period method, and it requires a payback of three years or less, which project(s) should be selected? 0Q5 From the attached please answer part G a. Determine the initial outlay of the project.b. Calculate the annual after-tax operating cash flow for Years 1 -5.c. Determine the terminal year non-operating cash flow in year 5:d. Taking into consideration all the information given, determine the Net Present Value of the project and advice the company on whether to invest in the new line of product.e. What is the estimated Internal Rate of Return (IRR) of the project?f. Should the project be accepted based on the IRR? g. Calculate to the following for Pharmos considering its tax rate of 25 percent. i. Total Market Value for the Firm ii, After-tax cost of Loaniii. After-tax cost of Bondsiv. Cost of Equityv. Cost of Preferred Stockvi. Weighted Average Cost of Capital (WACC)Part D: Investment Decisions Now consider that Luxio has identified the following two mutually exclusive projects: Year 0 1 2 3 4 Cash Flow (A) -$34,000 $16,500 $14,000 $10,000 $6,000 Cash Flow (B) -$34,000 $5,000 $10,000 $18,000 $19,000. 1. What is the IRR for each of these projects? Based on IRR decision rule, which project should the company accept? 2. If the required return is 11%, what is the NPV for each of these projects? Based on the NPV decision rule, which project should the company accept? 3. Over what range of discount rates would the company choose project A? At what discount rate would the company be indifferent between these two projects? Explain.
- 26 Exercises 3, 5-7, 14 &18 & 15, Tableau D...i bok int rint rences Information for two alternative projects involving machinery investments follows: Initial investment Salvage value Annual income Required A Project 1 $ (122,000) Required B Project 1 Project 2 0 15,250 a. Compute accounting rate of return for each project. b. Based on accounting rate of return, which project is preferred? Complete this question by entering your answers in the tabs below. Project 2 $ (92,000) 12,000 12,480 Compute accounting rate of return for each project. Numerator: Saved Accounting Rate of Return I < Prev Denominator: 3 of 9 IL Next Accounting rate of returnThe following table contains information about four projects in which Morales Corporation has the opportunity to invest. This information is based on estimates that different managers have prepared about their potential project. E (Click the icon to view the projects information.) Requirements 1. Rank the four projects in order of preference by using the a. net present value. d. payback period. 2. Which method(s) do you think is best for evaluating capital investment projects in general? Why? c. internal rate of return. b. project profitability index. e. accounting rate of return. Requirement 1. Rank the projects in order of preference. (a) (b) (c) (d) (e) Net Present Profitability Internal Rate Payback Accounting Rate Value Index of Return Period of Return 1st preferred A C 2nd preferred 3rd preferred C 4th preferred ADB D ABUse python to answer the following question: Question 5 A capital investment in an equipment with an upfront cost of $23,540 will provide you with the following annual cash flow stream (paid end of year): 1. $2,000 2. $1,456 3. $3,230 4. $6,850 5. $2,384 6. $1,234 7. $5,987 8. $4,190 The project will incur the following cost for maintenance and repair (paid end of year): Year 3: ($2,984) Year 4: ($1,837) Year 6-8: ($2,000) Calculate the NPV of the investment and comment on whether you should invest in the project. Why or why not? What is the IRR of the investment? The required rate of return is 3.5%.