An Investment Project Has Annual Cash Inflows Of $4,300, $4,000, $5,200

1. An investment project has annual cash inflows of $4,300, $4,000, $5,200, and $4,400, and a discount rate of 13 percent.

What is the discounted payback period for these cash flows if the initial cost is $5,800? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Don't use plagiarized sources. Get Your Custom Essay on
An Investment Project Has Annual Cash Inflows Of $4,300, $4,000, $5,200
Just from $5/Page
Order Essay

Discounted payback period   years

What is the discounted payback period for these cash flows if the initial cost is $7,900? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Discounted payback  period   years

 

What is the discounted payback period for these cash flows if the initial cost is $10,900? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Discounted payback period   years

 

 

2. Stone Sour, Inc., has a project with the following cash flows:

Year Cash Flow
0 –$ 27,900
1   11,900
2   14,900
3   10,900
________________________________________

The required return is 18 percent. What is the IRR for this project? (Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16))

IRR   %

 

 

3. Bill plans to open a self-serve grooming center in a storefront. The grooming equipment will cost $480,000, to be paid immediately. Bill expects aftertax cash inflows of $103,000 annually for eight years, after which he plans to scrap the equipment and retire to the beaches of Nevis. The first cash inflow occurs at the end of the first year. Assume the required return is 13 percent.

What is the project’s PI? (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161))

PI

 

3. Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 17 percent.

Year Deepwater Fishing New Submarine Ride
0 −$ 1,000,000   −$ 1,950,000
1   420,000     1,000,000
2   550,000     850,000
3   470,000     850,000
________________________________________

a-1. Compute the IRR for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))

IRR
Deepwater Fishing   %

Submarine Ride   %

________________________________________

 

b-1. Calculate the incremental IRR for the cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

Incremental IRR   %

Answer: 17.15

c-1. Compute the NPV for both projects.(Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))

NPV
Deepwater Fishing $

Submarine Ride $

________________________________________

4. The Robb Computer Corporation is trying to choose between the following two mutually exclusive design projects:
Year Cash Flow (I)   Cash Flow (II)
0 –$ 54,000     –$ 19,000
1   41,000       10,200
2   41,000       10,200
3   41,000       10,200
________________________________________

a-1. If the required return is 11 percent, what is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161))

Profitability Index
Project I

Project II

________________________________________

b-1. What is the NPV for each project? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))

NPV
Project I $

Project II $

________________________________________

5. Mario Brothers, a game manufacturer, has a new idea for an adventure game. It can market the game either as a traditional board game or as an interactive DVD, but not both. Consider the following cash flows of the two mutually exclusive projects for Mario Brothers. Assume the discount rate for Mario Brothers is 10 percent.

Year Board Game DVD
0 –$ 1,600    –$ 3,500
1   770     2,150
2   1,350     1,650
3   290     1,200
________________________________________
a. What is the payback period for each project? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

Payback period
Board game

DVD

________________________________________

b. What is the NPV for each project? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

NPV
Board game $

DVD $

________________________________________

c. What is the IRR for each project? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

IRR
Board game   %

DVD   %

________________________________________

d. What is the incremental IRR? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Incremental IRR   %

 

6. Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the discount rate for Tokyo Rubber Company is 8 percent.

Year Dry Prepreg Solvent Prepreg
0 –$ 1,840,000   –$ 820,000
1   1,114,000     445,000
2   928,000     740,000
3   764,000     418,000
________________________________________
a. What is the payback period for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))

Payback period
Dry Prepeg   years

Solvent Prepeg   years

________________________________________

b. What is the NPV for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))

NPV
Dry Prepeg $

Solvent Prepeg $

_______________________________________

c. What is the IRR for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))

IRR
Dry Prepeg   %

Solvent Prepeg   %

________________________________________

d. Calculate the incremental IRR for the cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

Incremental IRR   %

 

7. Consider two mutually exclusive new product launch projects that Nagano Golf is considering. Assume the discount rate for Nagano Golf is 13 percent. (Do not round intermediate calculations. Round your “PI” answers to 3 decimal places (e.g., 32.161) and other answers to 2 decimal places. (e.g., 32.16))

Project A: Nagano NP-30.
Professional clubs that will take an initial investment of $640,000 at time 0.
Next five years (Years 1–5) of sales will generate a consistent cash flow of $275,000 per year.
Introduction of new product at Year 6 will terminate further cash flows from this project.
Project B: Nagano NX-20.
High-end amateur clubs that will take an initial investment of $650,000 at Time 0.
Cash flow at Year 1 is $190,000. In each subsequent year cash flow will grow at 10 percent per year.
Introduction of new product at Year 6 will terminate further cash flows from this project.

Year NP-30 NX-20
0 –$ 640,000   –$ 650,000
1   275,000     190,000
2   275,000     209,000
3   275,000     229,900
4   275,000     252,890
5   275,000     278,179
________________________________________

Complete the following table:

NX-30   NX-20
Payback
years
years
IRR
%
%
PI

NPV $
$

________________________________________

 

Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

We are committed to making our customer experience enjoyable and that we are keen on creating conditions where our customers feel secured and respected in their interactions with us.
With our qualified expert team who are available 24/7, we ensure that all our customer needs and concerns are met..

Money Payback-back guarantee

Our refund policy allows you to get your money back when you are eligible for a refund. In such a case, we guarantee that you will be paid back to your credit card. Another alternative we offer you is saving this money with us as a credit. Instead of processing the money back, keeping it with us would be an easier way to pay for next the orders you place

Read more

Zero-plagiarism guarantee

All orders you place on our website are written from scratch. Our expert team ensures that they exercise professionalism, the laid down guidelines and ethical considerations which only allows crediting or acknowledging any information borrowed from scholarly sources by citing. In cases where plagiarism is confirmed, then the costumier to a full refund or a free paper revision depending on the customer’s request..

Read more

Free-revision policy

Quality is all our company is about and we make sure we hire the most qualified writers with outstanding academic qualifications in every field. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.

Read more

Privacy policy

We understand that students are not allowed to seek help on their projects, papers and assignments from online writing services. We therefore strive to uphold the confidentiality that every student is entitled to. We will not share your personal information elsewhere. You are further guaranteed the full rights of originality and ownership for your paper once its finished.

Read more

Fair-cooperation guarantee

By placing an order with us, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency