Project A has NPV = + $2,000, IRR = 12% and discounted payback period of 3 years. Project B has NPV = + $2,200, IRR = 11% and discounted payback period of 7 years Project C has NPV = + $4,000, IRR = 15% and discounted payback period of 4 years Project D has NPV = + $3,000, IRR 17% and discounted payback period of 4 years If the board of directors for the company has a priority of maximizing value to the company's asset portfolio in its selection of projects, which of the projects should be approved first? A. Project A B. Project BC. Project CD. Project D
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- Project A costs $5,000 and will generate annual after-tax net cash inflows of $1,800 for five years. What is the NPV using 8% as the discount rate?Project X costs $10,000 and will generate annual net cash inflows of $4,800 for five years. What is the NPV using 8% as the discount rate?A certain project with annual benefit of P 50,000 at the end of each year for a period of 6 years. Assuming money is 10% and benefit ratio is 1.02, compute the cost of the project. a. P426,896.00 b. P426,986.00 c. P426,968.00 d. P462,986.00
- Projects A and B have first costs of $5,000 and $9,000 respectively. Project A has net annual benefits of $2,500 during each year of its 5-year useful life, after which it can be replaced identically. • Project B has net annual benefits of $3,300 during each year of its 10-year life. Use present worth analysis, an interest rate of 30% per year, and a 10-year analysis period to determine which project to select. Project A Project BIf a project requires a $1000 initial investment, it returns $500 at the end of the first year, $600 at the end of the second year, $700 at the end of the third year, and -$500 in the fourth year. Calculate MIRR for this project if the discount rate is 9% O 10.45% O 14.77% 15.96% O 11.99%Project A has an initial investment of Rs. 22 million and projected cash inflows of Rs. 60,00,000 for 5 years. Project B has an initial investment of Rs. 19.5 million and projected cash inflows of Rs. 55,00,000 for 5 Assume the discount rate to be 11 percent during Year 1 and thereby increases by 1 percent each year. years. a. Work out the NPV of the two projects and compare the results. Which project should be approved? Why? b. Work out the Undiscounted and Discounted Pay Back Period for the two projects. If the criterion is 5 years, which project should be considered based on Discounted PBP? c. Work out the Benefit Cost Ratio (BCR) for the two projects. Which project is acceptable? Why?
- An investment project has an initial cost of $260 and cash flows $75, $105, $100, and $50 for years 1 to 4 respectively. The cost of capital is 12%. What is the discounted payback period?An investment project costs $21,500 and has annual cash flows of $6,500 for 6 years. If the discount rate is 15 percent, what is the discounted payback period? Select one: a. 5.71 b. 3.91 c. 4.21 d. 4.91 e. 5.91Project A has an initial investment of Rs. 19 lakhs and projected cash inflows of Rs. 5,00,000 for 5 years. Project B has an initial investment of Rs.33.75 lakhs and projected cash inflows of Rs. 9,00,000 for 5 years. Assume the discount rate to be 9 percent throughout (a) Work out the Undiscounted and Discounted Pay Back Period for two projects. If the criterion is 5 years, which project should be considered based on Discounted PBP? (b) Work out the Net Benefit Cost Ratio for the two projects. Which project is acceptable? Why?
- A company is considering two projects. The discount rate is 10 percent, and the projects’ cash flows would be: Years 0 1 2 3 Project A -$700 $500 $300 $100 Project B -$700 $100 $300 $600 Calculate the projects’ NPVs and IRRs. Project (A): NPV= =777.61-700=77.61 IRR= =18.005% Project (B): NPV= =789.63-700=89.63 IRR= =15.559% If the two projects are independent, which project(s) should be chosen? If the two projects are mutually exclusive, which project should be chosen?Consider the following project. Costs: $100,000, at time t = 0. $45,000, at time t = 4. Income: Three payments of $10,000, each one year apart, with the first payment at time t = 1. Four payments of $60,000, each paid every 4 years apart, with the first payment at time t = 4.5. Assuming that the project is financed by a loan which is subject to interest of 6% per annum (effective), and that interest is earned in an investment fund at 3% per annum (effective), determine the accumulated value of this project at time t = 20. You may assume that debt (the loan) is to repaid prior to money being invested in the investment fund. Give your answer to the nearest dollar. Show all working.An investment project costs $15,600 and has annual cash flows of $3,900 for six years. a. What is the discounted payback period if the discount rate is zero percent? Discounted payback period b. What is the discounted payback period if the discount rate is 6 percent? Discounted payback period