An investment center manager is considering three possible investments. The company's required return is 10%. The required asset investment, controllable margins, and the ROIs of each investment are as follows: Project Average Investment Controllable Margin AA $160,000 $33,440 BB 140,000 18,140 CC 220,000 68,480 The investment center is currently generating an ROI of 23% based on $1,200,000 in operating assets and a controllable margin of $278,000. If the manager can select only one project, determine which is the best choice to increase the investment center's ROI by computing the investment center's ROI for each of the investment alternatives. (Round answer to 1 decimal place, eg. 52.5.) is the best choice and ROI will be %
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- An investment center manager is considering three possible investments. The company’s required return is 10%. The required asset investment, controllable margins, and the ROIs of each investment are as follows: Project Average Investment Controllable Margin AA $170,000 $44,960 BB 150,000 29,240 CC 230,000 79,640 The investment center is currently generating an ROI of 23% based on $1,210,000 in operating assets and a controllable margin of $289,000.If the manager can select only one project, determine which is the best choice to increase the investment center’s ROI by computing the investment center’s ROI for each of the investment alternatives. (Round answer to 1 decimal place, e.g. 52.5.)compute for ROI, NPV and Profitability Index I. Create a structural organization of your team. Choose any of the exampled structu assign a designation to cach member. State the qualifications of each of every team member. II. Select the most profitable project, using required rate of return of 15% - Project A Initial Investment = 50,000 Cash fiow for the next 3 years = 25,000 Project B Initial Investment = 100,000 Cash flow for the next 4 years = 31,250 - Project C Initial Investment = 150,000 Cash flow for the next 5 years = 35,000The manager of a small firm wants to know which among the three different projects should the company enter into. Details of the three projects are as follows: JOJO GINA MARIA LORINDA KANOR Initial investment P 120,000 P 125,000 P 180,000 P160,000 P35,000 Net present value 25,000 24,000 45,000 35,000 10,000 Internal rate of return 10% 15% 12% 8% 9% Profitability index 1.21 1.19 1.25 1.22 1.29 If the management has a budget of P500,000 only, which projects would be undertaken? a. Jojo, Gina, Lorinda, and Kanor b. Gina, Maria, Lorinda, and Kanor c. Jojo, Maria, Lorinda, and Kanor d. Jojo, Gina, Maria, and Kanor
- Crane Company had the following operating data for the current year: sales, $470000; contribution margin, $117000; total fixed costs (controllable), $50000; and average total operating assets, $240000. If management is able to improve its contribution margin by $17000 and hold its fixed costs constant, what would Crane's ROI be for the year? Ⓒ28% 35% Ⓒ49% 18%.Use the format in the figure below to perform a financial analysis. Create a spreadsheet to perform the analysis and show the NPV, ROI, and year in which payback occurs. + Perform a financial analysis for a project using the format provided in Figure 4-5. Assume that the projected costs and benefits for this project are spread over four years as fol- lows: Estimated costs are $200,000 in Year 1 and $30,000 each year in Years 2, 3, and 4. Estimated benefits are $0 in Year 1 and $100,000 each year in Years 2, 3, and 4. Use a 9 percent discount rate, and round the discount factors to two decimal places. Create a spreadsheet or use the business case financials template on the companion website to cal- culate and clearly display the NPV, ROI, and year in which payback occurs. In addition, write a paragraph explaining whether you would recommend investing in this project, based on your financial analysis. Discount rate 8% Assume the project is completed in Year 0 0 Costs Discount factor…The area manager of the Oriole Restaurants is considering two possible expansion alternatives. The required investments, expected controllable margins, and the ROIs of each are as follows: Project Investment Controllable Margin ROI Phoenix $150000 $30000 20.00% Chicago $55000 $50000 9.09% The Oriole segment has currently $2000000 in average operating assets and a controllable margin of $250000. Which one of the following projects will increase the Oriole division's ROI? Both the Phoenix and the Chicago options Only the Phoenix option Only the Chicago option Neither the Phoenix nor the Chicago options
- Compute the payback period and ROI (Return on Investment) for the following Initial investment - 800000 Year one - 250,000 Year two: 250,000 Year three - 250,000 Year four - 250,000use excel 9. A firm faces three investment opportunities A, B and C: A. NPV = $3m, investment = $1m B. NPV = $2m, investment = $2m C. NPV = $2.5m, investment = $3m Given a total of $4m initial resources, which one(s) should the firm take? Explain.A firm is evaluating a project with the following cash flows. At a required return of 11 percent, what is the project's NPV? What if the required return is 24 percent? Input area: Required Return Required Return Year 0 Year 1 Year 2 Year 3 Output area: es es es es NPV at 11% NPV at 24% Մ $ $ 11% 24% (Use cells A6 to B11 from the given information to complete this question. You must use the built Excel function to answer this question.) (41,000) 20,000 23,000 14,000
- Superior Dlvision of the Monroe Company has an opportunity to invest in a new project. The project will yield an incremental operating Income of $73,700 on average invested assets of $$907,000. Superior Division currently has operating income of $432,000 on average Invested assets of $4,332,000. Monroe Company has a 7.7% hurdle rate for new projects. a. What is Superior Division's ROI before making an investment in the project? (Round your answer to 2 decimal places.) Retum on Investment b. What is Superior Division's residual income before making an investment in the project? Residual Income c. What is Superior Division's ROI after making the investment in the project? (Round your answer to 2 decimal places.) Retum on InvestmentBelow are four cases that you will have to solve using Excel spreadsheets. 1st case The company COMERCIAL SA has two investment alternatives that present the following information: PROJECT A B It is requested Initial investment. $25,000 $22,000 Cash flows year 1 1. Determine the internal rate of return. 2. Determine the present value. $7,000 $12,000 The discount rate for the project will be 10% and the MARR will be 20%. 3. Determine the recovery period. 4. Define which is the most viable project. Year 2 cash flows $15,000 $8,000 Year 3 cash flows $18,000 $12,000Use Microsoft Excel to assess the internal rate of return for an IT initiative. Suppose the initial investment is $60,000. The returns on investment in dollars for the following 5 years are (a) $10,000, (b) $12,000, (c) $15,000, (d) $21,000, and (e) $26,000. Use the IRR function to compute the internal rate of return after 2, 4, and 5 years. Next, assume that the loan for the initial $60,000 is at 8 percent and you are earning 16 percent on the annual returns. Use the MIRR function to calculate the internal rate of return. Required: 1. What is the Internal Rate of Return after 2 years? -46% -20% -1% -10% Required: 2. What is the Internal Rate of Return after 4 years? -46% -20% -1% 10% Required: 3. What is the Internal Rate of Return after 5 years? 10% 16% 8% 20%