2.2 What conclusions may be drawn aboutthe abilities of the three towns tofinance a proposed water treatment facility:Debt per capita as Debt per full propertyCity Current Projected Current ProjectedCurrent ProjectedA $946 $950 22.3 22.3 15.0 15.1B $335 $337 9.1 9.1 7.8 7.9C $6 $411 0.1 10.7 0.1 8.6Debt per capita % per capita income valuationDiscuss the current financial picture of eachtown as well as the projected incrementalimpact of this new proposed construction

Debt per capita is a financial metric that calculates the average amount of debt owed by each…

What conclusions may be drawn about abilities of the three towns to ance a proposed water treatment facility: ot per capita as Debt per full property Current Projected Current Projected rent Projected 946 $950 22.3 22.3 15.0 15.1 335 $337 9.1 9.1 7.8 7.9 6 $411 0.1 10.7 0.1 8.6 ot per capita % per capita income valuation cuss the current financial picture of each n as well as the projected incremental pact of this new proposed construction

What conclusions may be drawn about abilities of the three towns to ance a proposed water treatment facility: ot per capita as Debt per full property Current Projected Current Projected rent Projected 946 $950 22.3 22.3 15.0 15.1 335 $337 9.1 9.1 7.8 7.9 6 $411 0.1 10.7 0.1 8.6 ot per capita % per capita income valuation cuss the current financial picture of each n as well as the projected incremental pact of this new proposed construction

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You are given the following data for a project that is to be evaluated using the APV method. Year EBIT CAPEX 0 O $201.765 O $193,822 O $185,617 O $222,872 O $213,918 1 $127.000 $60,000 2 Depreciation Increase in NWC Year-end net debt $80,000 Cost of net debt = 8% Unlevered cost of capital = 11.8% Corporate tax rate = 30% Calculate the total value of the project at t = 0. using the APV method. $72,000 $50,000 $100,000 $133,000 $40,000 $80,000 $60,000 $140,000 3 $138.500 $10,000 $84,000 $30,000 $140,000
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?
sent value index Tasty Doughnuts has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows: Total present value of net cash flow Amount to be invested Net present value Des Moines Cedar Rapids $192,610 $214,080 (187,000) $5,610 (223,000) $(8,920) a. Determine the present value index for each proposal. Round your answers for the present value index to two decimal places. Total present value of net cash flow Amount to be invested Des Moines Cedar Rapids Present value index b. Which location does your analysis support? (If both present value indexes are the same, either location will grade as correct.) , because the net present value index is 1.
Star City is considering an investment in the community center that is expected to return the following cash flows: Use Exhibit A.8. Year Net Cash Flow 1234in 5 $ 28,000 58,000 88,000 88,000 108,000 This schedule includes all cash inflows from the project, which will also require an immediate $208,000 cash outlay. The city is tax-exempt; therefore, taxes need not be considered. Required: a. What is the net present value of the project if the appropriate discount rate is 22 percent? (Round PV factor to 3 decimal places. Negative amount should be indicated by a minus sign.) Net present value
Consider the following cash flows for two mutually exclusive capital investment projects. The required rate of return is 16%. Use this information for the next 3 questions. Year Project A Cash Flow Project B Cash Flow ($50,000) ($20,000) 15,000 6,000 15,000 6,000 3 15,000 6,000 4 13,500 5,400 13,500 5,400 6,750 5,400
First United Bank Inc. is evaluating three capital investment projects using the net present value method. Relevant data related to the projects are summarized as follows: BranchOfficeExpansion ComputerSystemUpgrade ATMKioskExpansion Amount to be invested $686,053 $516,654 $295,458 Annual net cash flows: Year 1 411,000 288,000 177,000 Year 2 382,000 259,000 122,000 Year 3 349,000 230,000 89,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Required: 1. Assuming that the desired rate of return is 20%, prepare a net present value analysis for each project. Use the…
Armaan Incorporation, has two investment proposals, which have the following characteristics:PROJECT A PROJECT BPERIODCOSTPROFIT AFTER TAXNET CASH FLOWCOSTPROFIT AFTER TAXNET CASH FLOW 0$9,000--$12,000-- 1 $1,000$5,000 $1,000$5,000 2 $1,000$4,000 $1,000$5,000 3 $1,000$3,000 $4,000$8,000 For each project, compute its payback period, its net present value, and its proﬁtability index using a discount rate of 15 percent.
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) -598 -384 1 110 1 105 170 105 3 210 3 95 320 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?
Present value index Tasty Doughnuts has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows: Des Moines Cedar Rapids $277,680 (267,000) $10,680 Total present value of net cash flow Amount to be invested Net present value a. Determine the present value index for each proposal. Round your answers for the present value index to two decimal places. Total present value of net cash flow Amount to be invested Present value index $302,100 (318,000) $(15,900) I Des Moines b. Which location does your analysis support? (If both present value indexes are the same, either location will grade as correct.) 1. Cedar Rapids because the net present value index is
Determine the best alternatives for a government project with the following data: PROJECT A B C ANNUAL BENEFIT P250,000.00 P320,000.00 P350,000.00 ANNUAL COSTS P100,000.00 P135,000.00 p180,000.00 B/C RATIO 2.5 2.37 1.94 What is the best Project and its incremental ratio? a. A = 1.2 b. A = 2 c. B = 2.0 d. B = 1.18
Net Present Value Method, Present Value Index, and Analysis First United Bank Inc. is evaluating three capital investment projects using the net present value method. Relevant data related to the projects are summarized as follows: BranchOfficeExpansion ComputerSystemUpgrade ATMKioskExpansion Amount to be invested $787,317 $584,976 $298,035 Annual net cash flows: Year 1 391,000 278,000 164,000 Year 2 364,000 250,000 113,000 Year 3 332,000 222,000 82,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Required: 1. Assuming that the desired rate of return is 10%,…
Complete the projected income statement for the first five years of the project. Fill in the following details , Determine the PAT of the project as a banker will you finance them on the basis of PAT Year 1 2 3 4 Capacity utilization (%) 55 65 75 85 85 Sales Operating expenses Material Salaries Marketing & other 119 137 155 173 173 expenses PBDIT Depreciation 236.92 180.10 137.38 105.20 80.98 Prelm. Exp. Wloff 10 10 10 10 10 PBIT Int. on TL Int. on WC loan 4.50 4.50 4.50 4.50 4.50

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