Group Portfolio Proposal Total Investment Security 1 ΚΟ Price = $46 X 100,000 Shares 500 Input Cells Calculated Cells Security Investment $ 23,000.00 Security Investment = Weight Beta 0.23 X 0.768 = 0.1766
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- Start with the partial model in the file Ch10 P23 Build a Model.xlsx on the textbooks Web site. Gardial Fisheries is considering two mutually exclusive investments. The projects expected net cash flows are as follows: a. If each projects cost of capital is 12%, which project should be selected? If the cost of capital is 18%, what project is the proper choice? b. Construct NPV profiles for Projects A and B. c. What is each projects IRR? d. What is the crossover rate, and what is its significance? e. What is each projects MIRR at a cost of capital of 12%? At r = 18%? (Hint: Consider Period 7 as the end of Project Bs life.) f. What is the regular payback period for these two projects? g. At a cost of capital of 12%, what is the discounted payback period for these two projects? h. What is the profitability index for each project if the cost of capital is 12%?Which of the following statement is true? * IRR and discount rate all have the same meaning.... If BCR is less than zero, an investment to a conservation project is worthwhile.... Both of them are trueModule 02 Written Assiqnment Application of Future Value and Present Value.xlsx - OpenOffice Calc File Edit View Insert Format Iools Data Window Help ABC 《 的, ABC Verdana 10 В I U 三 開 % 0 □ A B G H I 1. Assume an investment of $2,000 today. Calculate the FV of the investment according to eac 6. 7 a. 6 percent compounded annually 8 9. Rate 6% 10 Nper PMT 12 11 12 PV $2,000.00 $0.00 13 FV 14 15 b. 8 percent compounded annually 16 17 Rate 8% 18 Nper 12 19 PMT 20 PV $2,000.00 21 FV 22 23 c. 10 percent compounded annually 24 25 Rate 10% 26 Nper 12 27 PMT 28 PV $2,000.00 29 FV 30 31 d. 10 percent compounded semiannually 32 Rate K Future Value Present Value 33 10% STD Sheet 1/2 PageStyle Future Value
- ch A project with an initial investment of $88000 and a profitability index of 1.239 also has an internal rate of return of 12%. The present value of net cash flows is O $71025. O $98560. O $88000. O $109032. Save for Later O Et V B 21 E 7 Attempts: 0 of 1 used Submit Answer F12Following is information on two alternative investments being considered by Jolee Company. The company requires a 8% return from its investments. (PV of $1, FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 Year 4 Year 5 Required A Required B Project A $(183,325) a. For each alternative project compute the net present value. b. For each alternative project compute the profitability index. If the company can only select one project, which should it choose? Initial Investment $ Chart Values are Based on: i=P % 45,000 58,000 78,295 87,400 60,000 Complete this question by entering your answers in the tabs below. For each alternative project compute the net present value. Project A 183,325 Project B $(143,960)32. Consider the following three investments. Projects co. 2,500 2,500 2,500 Outflow c2 3,305 1,540 с1 1,540 2,875 inflow 1 y inflow 2 The discount rate is 12 % Compute the NPV & IRR for each project If you have to select one, which one would you select? Why?
- A firm is considering the following independent projects. Project Investment Present value offuture cash flows NPV A $130 $176 $46 B $103 $115 $12 C $183 $287 $104 D $161 $199 $38 E $184 $273 $89 What is the Profitability Index of Project B? Question 5Answer a. 0.85 b. 1.12 c. 0.89 d. 1.18Details WACC 0 SGWN-O 1 2 3 4 5 6 7.80% Project A Project B -1225 395 402 423 432 489 512 -2146 592.5 603 634.5 648 733.5 768 1. Construct NPV profile table by using cashflows from Project A and B above. 2. Draw NPV profile 3. Compute crossover rate To receive EC your work has to be done in Excel.Compute the NPV for Project X with the cash flows shown as follows if the appropriate cost of capital is 9 percent. Time: 1 2 3. 4 Cash flow: -1,000 -75 100 100 2,000 Multiple Choice $486.29 -$639.96 $392.44 $360.04 MacBook Air
- Whispering Inc. now has the following two projects available: Project Initial CF After-tax CF1 After-tax CF2 1 2 PMT1 PMT2 $ $ -11,634.42 Project 1 -3,290.48 5,300 3,800 Assume that RF = 5.1 percent, risk premium = 10.6 percent, and beta = 1.2. Use the EANPV approach to determine which project Whispering Inc. should choose if they are mutually exclusive. (Round cost of capital and final answers to 2 decimal places, e.g.17.35% or 2,513.25.) 1673.12 1479.74 6,200 should be chosen. 3,200 After-tax CF3 9,600Refer to the table below to answer the following question. Project Initial Investment NPV IP 200 22 Q 180 26 IR 185 38 IS 380 10 The project with highest Profitability Index is Project P Project Q Project R Project SValue/other investment criteria (i Saved Help Save Consider the following two projects: Cash flows Project A Project B -$270 CO -$270 С1 115 143 C2 115 143 Сз 115 143 C4 115 a. If the opportunity cost of capital is 10%, which of these two projects would you accept (A, B, or both)? b. Suppose that you can choose only one of these two projects. Which would you choose? The discount rate is still 10%. Which one would you choose if the cost of capital is 15%? d. What is the payback period of each project? e. Is the project with the shortest payback period also the one with the highest NPV? f. What are the internal rates of return on the two projects? g. Does the IRR rule in this case give the same answer as NPV? h-1. If the opportunity cost of capital is 10%, what is the profitability index for each project? h-2. Is the project with the highest profitability index also the one with the highest NPV? h-3. Which measure should you use to choose between the projects? Complete this question by…