Following is information on two alternative investments. Beachside Resort is considering building a new pool orspa. The company requires a 10% return from its investments.Initial investmentNet cash flows in:Year 1Year 2Year 3Year 4Year 5PoolSpaIRRPool$ (177,000)%%41,70057,70081,99592,10066,700Compute the internal rate of return for each of the projects using excel functions.Note: Round your answers to 2 decimal places.Spa$ (122,000)33,70051,70067,70073,70025,700

Internal rate of return is the rate at which a company analyses the cash flows of the project at…

Following is information on two alternative investments. Beachside Resort is co spa. The company requires a 10% return from its investments. Initial investment Net cash flows in: Year 1 Year 2 Year 3 Year 4 Year 5 Pool $ (177,000) 41,700 57,700 81,995 92,100 66,700 Spa $ (122,000) 33,700 51,700 67,700 73,700 25,700 Compute the internal rate of return for each of the projects using excel function Note: Round your answers to 2 decimal places.

Following is information on two alternative investments. Beachside Resort is co spa. The company requires a 10% return from its investments. Initial investment Net cash flows in: Year 1 Year 2 Year 3 Year 4 Year 5 Pool $ (177,000) 41,700 57,700 81,995 92,100 66,700 Spa $ (122,000) 33,700 51,700 67,700 73,700 25,700 Compute the internal rate of return for each of the projects using excel function Note: Round your answers to 2 decimal places.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 9PB: Joliet Company is considering two alternative investments. The company requires an 18% return from...

See similar textbooks

Similar questions

Following is information on two alternative investments. Beachside Resort is considering building a new pool or spa. The company requires a 10% return from its investments. Initial investment Net cash flows in: Year 1 40,000 Year 2 56,000 Year 3 80,295 Year 4 90,400 Year 5 65,000 Compute the internal rate of return for each of the projects using excel functions. (Round your answers to 2 decimal places.) Pool Spa IRR Pool Spa $ (160,000) $ (105,000) % % 32,000 50,000 66,000 72,000 24,000
Below 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 $12,000
Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 4% return from its investments. Initial investment Net cash flows in: Year 1 Year 2 Year 3 Project X1 Project X2 IRR 21.00 % 12.00 % Project X1 $ (90,000) Yes Yes 30,000 40,500 65,500 Compute the internal rate of return for each of the projects using Excel functions. Based on internal rate of return, indicate whether each project is acceptable. Note: Round your answers to 2 decimal places. Acceptable? Project X2 $ (140,000) 67,500 57,500 47,500
Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 5% return from its investments. Project X1 Project X2 Initial investment $ (112,000) $ (184,000) Net cash flows in: Year 1 41,000 84,000 Year 2 51,500 74,000 Year 3 76,500 64,000 Compute the internal rate of return for each of the projects using Excel functions. Based on internal rate of return, indicate whether each project is acceptable. (Round your answers to 2 decimal places.)
Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 6% return from its investments. Project X1 Project X2 Initial investment $ (114,000) $ (188,000) Net cash flows in: Year 1 42,000 85,500 Year 2 52,500 75,500 Year 3 77,500 65,500 Compute the internal rate of return for each of the projects using Excel functions. Based on internal rate of return, indicate whether each project is acceptable. Note: Round your answers to 2 decimal places.
Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 4% return from its investments. Project X1 Project X2 Initial investment $ (120,000) $ (200,000) Net cash flows in: Year 1 45,000 90, 000 Year 2 55,500 80,000 Year 3 80,500 70,000 Compute the internal rate of return for each of the projects using Excel functions. Based on internal rate of return, indicate whether each project is acceptable.
Following Is Information on two alternative Investments belng considered by Tiger Co. The company requires a 4% return from Its Investments. Project X1 $(100,000) Project X2 $(160,800) Initial investment Expected net cash flows in: Year 1 35,000 45,500 70,500 75,000 65, 000 55,000 Year 2 Year 3 Compute the Internal rate of return for each of the projects using Excel functlons. Based on Internal rate of return, Indicate whether each project Is acceptable. (Round your answers to 2 declmal places.) IRR Acceptable? Project X1 Project X2 Mc Graw Hill Lducation Type here to search *+ F10 F11 AI F2 F7 F8 F9 F3 F4 F5 F6 F1 & 23 4 5 7 T G H. V N M C * 0O B
Cash Payback Period, Net Present Value Method, and Analysis Elite Apparel Inc. is considering two investment projects. The estimated net cash flows from each project are as follows: Plant Expansion Retail Store Expansion Year 1 2 3 4 5 Total Year 1 2 Each project requires an investment of $294,000. A rate of 15% has been selected for the net present value analysis. Present Value of $1 at Compound Interest 6% 10% 12% 15% 20% 0.893 0.870 0.833 0.797 0.756 0.694 3 4 5 $162,000 132,000 114,000 103,000 33,000 $544,000 6 7 8 9 10 Required: 0.909 0.826 $135,000 159,000 109,000 76,000 65,000 $544,000 0.943 0.890 0.840 0.751 0.792 0.683 0.747 0.621 0.705 0.564 0.665 0.627 0.592 0.558 0.712 0.658 0.636 0.572 0.567 0.497 0.507 0.432 0.513 0.452 0.376 0.467 0.404 0.327 0.424 0.361 0.284 0.386 0.322 0.247 1a. Compute the cash payback period for each project. Cash Payback Period 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 Plant Expansion Retail Store Expansion 1b. Compute the net present value.…
X-treme Vitamin Company is considering two investments, both of which cost $20,000. The cash flows are as follows: Year Project A Project B 1 $ 23,000 $ 20,000 2 10,000 9,000 3 10,000 15,000 Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a-1. Calculate the payback period for Project A and Project B. (Round your answers to 2 decimal places.) project A 0.87 years project B 1 year b-1. Calculate the net present value for Project A and Project B. Assume a cost of capital of 8 percent. (Do not round intermediate calculations and round your final answers to 2 decimal places.)
X-treme Vitamin Company is considering two Investments, both of which cost $14,000. The cash flows are as follows: Tear Project A Project B $16,000 $14,000 5,000 9,000 2 3 6.000 4,000 Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a-1. Calculate the payback period for Project A and Project B. (Round your answers to 2 decimal places.) Project A Project B Payback Period year(s) year(s) a-2. Which of the two projects should be chosen based on the payback method? O Project A O Project B b-1. Calculate the net present value for Project A and Project B. Assume a cost of capital of 8 percent. (Do not round intermediate calculations and round your final answers to 2 decimal places.) Project A Project B Net Present Value
There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,017 and is expected to generate the following cash flows: First Year Second Year Third Year Total Alpha Project $32,000 $22,000 $4,500 $58,500 Beta Project 8,000 24,000 27,106 59,106 A. Calculate the internal rate of return on both projects. Use the IRR spreadsheet function to calculate internal rate of return. Alpha Project fill in the blank 1% Beta Project fill in the blank 2% B. Make a recommendation on which one to accept. .
Using the below informtion answer: 5.1 Payback Period of Project Tan (expressed in years, months and days). 5.2 Net Present Value of Project Tan.5.3 Accounting Rate of Return on average investment of Project Tan (expressed to two decimal places). INFORMATIONThe management of Mastiff Enterprises has a choice between two projects viz. Project Cos and Project Tan, each ofwhich requires an initial investment of R2 500 000. The following information is presented to you: PROJECT COS PROJECT TANNet Profit Net ProfitYear R1 130 000 80 0002 130 000 180 0003 130 000 120 0004 130 000 220 0005 130 000 50 000A scrap value of R100 000 is expected for Project Tan only. The required rate of return is 15%. Depreciation is calculatedusing the straight-line method.