Timeline Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $870,772, and project B's cost is $1,260,423. Cash flows from both projects are given in the following table. Year Project A Project B $86,212 $586,212 313,562 1 2. 413.277 3 427,594 231,199 4 285,552 What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.) Discounted payback periods of project A Discounted payback periods of project B Which will be accepted with a discount rate of 8 percent? Timeline should choose Click if you would like neither project or this question: Open Show Work Project A Project B Both projects LINK TO TEXT

Timeline Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $870,772, and project B's cost is $1,260,423. Cash flows from both projects are given in the following table. Year Project A Project B $86,212 $586,212 313,562 1 2. 413.277 3 427,594 231,199 4 285,552 What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.) Discounted payback periods of project A Discounted payback periods of project B Which will be accepted with a discount rate of 8 percent? Timeline should choose Click if you would like neither project or this question: Open Show Work Project A Project B Both projects LINK TO TEXT

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter9: Capital Budgeting Techniques

Section: Chapter Questions

Problem 12PROB

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ic Yo NS io cer ist bun ngs nnée Current Attempt in Progress Blossom Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $905,000, and project B's cost is $1,247,300. Cash flows from both projects are given in the following table. Year 1 2 3 4 Project A $86,212 313,562 427,594 285,552 Project B $586,212 413,277 231,199 What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.) Discounted payback period of project A Discounted payback period of project B will he accepted with a discount rate of 8 percent? átv zoom
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Week 7 Giant Machinery Ltd is considering to invest in one of the two following Projects to buy a new equipment. Each project will last 5 years and have no salvage value at the end. The company’s required rate of return for all investment projects is 9%. The cash flows of the projects are provided below. Project 1 Project 2 Cost $175,000 $185,000 Future Cash flow Year1 76,000 87,000 Year2 83,000 78,000 Year3 67,000 69,000 Year4 65,000 65,000 Year5 55,000 57,000 Required: a) Identify which project should the company accept based on NPV method. (Note: Please round up the result of each calculation of PV to 2 decimal places only for simplification) b) Identify which project should the company accept based on simple pay back method if the payback criteria is maximum 2 years. c) Which project Giant Machinery should choose if two methods are in conflict.
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QUESTION 10 A project will produce operating cash flows of $57,000 a year for 3 years. During the life of the project, inventory will be lowered by $10,000 and accounts receivable will increase by $20,000. Accounts payable will decrease by $5,000. The project requires the purchase of equipment at an initial cost of $90,000. The equipment will be salvaged at the end of the project creating a $17,000 after-tax cash inflow. At the end of the project, net working capital will return to its normal level. What is the net present value of this project given a required return of 12%? $48,772.08 $54,681.35 $56,209.19 $42,908.17 $44,141.41
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Warm-Up 10-1 (similar to) D Assigned Media E Question Help Elysian Fields, Inc., uses a maximum payback period of 6 years and currently must choose between two mutually exclusive projects. Project Hydrogen requires an initial outlay of $28,000; project Helium requires an initial outlay of $34,000. Using the expected cash inflows given for each project in the following table, , calculate each projects payback period. Which project meets Elysian's standards? The payback period of project Hydrogen isyears. (Round to two decimal places.) Data Table (Click on the icon here e in order to copy the contents of the data table below into a spreadsheet.) Expected cash inflows Hydrogen Year Helium 1 $6,500 $8,000 $8,000 $7,000 $4,500 $5,000 $5,000 $8,500 $3,000 $3,500 $2,500 $4,000 Print Done
A company has a project available with the following cash flows: Year 0 1 2 3 4 Cash Flow -$ 35,990 12,570 14,740 19,660 11,000 If the required return for the project is 7.9 percent, what is the project's NPV? Multiple Choice $21,980.00 $11,078.65 $3,970.46 $12,085.80 $13,812.35