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- Two investments have the following pattern of expected returns: Investnent A Year 1 $5, 100 Year 2 $10,100 Year 3 Year 4 Year 4 (Sale) $121,000 STCF $12,100 $15,100 Investment B Year 1 $2,100 Year 2 $4,100 Year 3 $1,100 Year 4 Year 4 (Sale) $181,000 BTCF $5,100 Investment A requires an outlay of $111,000 and Investment B requires an outlay of $121,000. Required: a. What is the BTIRR on each investment? b. If the BTIRR were partitioned based on BTCF, and BTCF, what proportions of the BTIRR would be represented by each? c. Which investment would be preferable?QUESTION 8 In the Romer model, output increases in the and decreases in the OA research share; growth rate of knowledge OB.saving rate; growth rate of knowledge OC. growth rate of knowledge; depreciation rate OD.saving rate; depreciation rate O E. growth rate of knowledge; fraction of population in the ideas sector W G K AE M. Al ControlAccording to Wald's criterion, which investment is decided by looking at the profitability of three investments such as S1, S2 and S3 in the following economic environments? Ekonomik Durumlar S1 S2 S3Canlı Ekonomik Durum 13 6 7Normal Ekonomik Durum 10 9 8Durgun Ekonomik Durum 7 14 4Resesyon Durumu 8 7 15 Economic Conditions S1 S2 S3 Vivid Economic Situation 13 6 7 Normal Economic Condition 10 9 8 Stagnant Economic Condition 7 14 4 Recession Condition 8 7 15
- Dwight Donovan, the president of Campbell Enterprises, is considering two investment opportunities. Because of limited resources, he will be able to invest in only one of them. Project A is to purchase a machine that will enable factory automation; the machine is expected to have a useful life of four years and no salvage value. Project B supports a training program that will improve the skills of employees operating the current equipment. Initial cash expenditures for Project A are $102,000 and for Project B are $47,000. The annual expected cash inflows are $32,178 for Project A and $15,474 for Project B. Both investments are expected to provide cash flow benefits for the next four years. Campbell Enterprises' desired rate of return is 6 percent. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required a. Compute the net present value of each project. Which project should be adopted based on the net present value approach? b. Compute the approximate…7 Rate of Return (ROR) is an important factor to consider to determine the gain or loss of an investment over a specified period of time. Please provide an explanation of the other evaluation metrics excluding the rate of returns to analyze precise profit and loss of an investment.Consider the sources and uses statements for the two sectors, X and Y, when answering the next two questions: Sector X Sector Y U U Net Worth 85 72 Real Assets 101 63 Financial Assets 43 27 Financial Liabilities 59 18 Totals 144 144 90 90 Which of the following statements is(are) true? ht 1. Sector X is a saver I1. Sector Y is an SSU III. Sector X is a DSU
- Use attachment to answer question q2- This question relates to the diagram, which shows the NPV profile for Projects X and Y. At what cost of capital are we indifferent between Projects X and Y? Select one: a. 13% b. 4% c. 10% d. 9%Question 2 You must choose between two investments, X and Y . The profitability index (PI), net present value (NPV) and internal rate of return (IRR) of the two investments are as follows: Criteria Investment X Investment Y NPV R44 000 −R22 000 PI 1,945 0,071 IRR 16,00% 8,04% Which investment(s) should you choose, taking all the above criteria into consideration, if the cost of capital is equal to 12% per year? [1] X [2] Y [3] Both X and Y [4] Neither X nor Y [5] Too little information to make a decision 17 DSC1630Q24. The level of detail in a model should not depend on the application. For example, for regular work you may forecast depreciation using a growth rate, a percentage of sales, or PP&E. Choices: True or False
- Please view the following videos before answering this question. Video Example 4.4 Video Example 4.8 When using the benefit-cost ratio measure of worth (B/C), what benchmark is the calculated ratio compared to in determining if an individual investment is attractive? O 1.0 O IRR O MARR O 0.0rayer.sop - PRACTICE MILESTONE 1 A Practice Milestone PDF 8. 10 11 12 13 14 15 16 17 O This is a practice Milestone and does not count towar Question Unit 1 Tutorials Question 1 The purpose of finance is to create maximum value through informed resource decisions understand how and why markets change Oeliminate all risk and uncertainty when it comes to investing assets O make as much money as possible over the long-term SAVE AND CONTINUE earchOpportunity Cost In the context of capital budgeting, what is an NG AND CONCEPTS REVIEW 9.2 Depreciation Gjyen the choice would a firm prefer to use MACRS 9.1 opportunity cost?