Use the information provided to answer the questions Calculate the Accounting Rate of Return (on average investment) of Project B (expressed to two decimal places). Calculate the Net Present Value of each project (with amounts rounded off to the nearest Rand). Use your answers from previous question to recommend the project that should be chosen. Motivate your choice.
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Use the information provided to answer the questions
Calculate the Accounting
decimal places).
Calculate the
Use your answers from previous question to recommend the project that should be chosen. Motivate
your choice.
Step by step
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- nando Designs is considering a project that has the following cash flow and cost of financing data. What is the project's discounted payback? Cost of financing: 10.00% Year 0 1 2 3 Cash flows -$900 $500 $500 $500 a. 1.88 years b. 2.09 years c. 2.29 years d. 2.52 years e. 2.78 yearsDoak Corp. is evaluating a project with the following cash flows: Year Cash Flow 0 -15,700 1 6,800 2 8,000 3 7,600 4 6,400 5 -3,800 The company uses an interest rate of 12 percent on all its projects. Calculate the MIRR of the project using this method. Discounting approach ____________%Solo Corporation is evaluating a project with the following cash flows: Year Cash Flow -$ 0 12345 29,200 11,400 14,100 16,000 13,100 -9,600 The company uses an interest rate of 9 percent on all of its projects. Calculate the MIRR of the project using all three methods. a. MIRR using the discounting approach. Discounting approach MIRR b. MIRR using the reinvestment approach. Reinvestment approach MIRR 20.14% 19.76% 18.22% 18.60% Combination approach MIRR 15.47% 15.17% 13.99% 14.29% c. MIRR using the combination approach. 14.49% 14.21% 13.11% 13.39%
- Exide batteries Inc is planning to expand its current production facility and is reviewing following project. Year Cash-flow 0 -500,000 1 200,000 2 50,000 3 35,000 4 280,000 WACC for the Project is 8%. You as financial Analyst required to prepare a report on project Feasibility. Requirements Calculate payback of the project also state advantages and disadvantages of this method. Calculate discounted payback of the project also state advantages and disadvantages of this method. Calculate NPV of the project. Should we take this project or not? Also state advantages and disadvantages of this method. Calculate IRR of the project also state advantages and disadvantages of this method.Solo Corp. is evaluating a project with the following cash flows: Year Cash Flow 0. s29,200 11.400 14,100 16,000 13,100 2. 3. 4. 9,600 The company uses a discount rate of 13 percent and a reinvestment rate of 6 percent on all of its projects. a. Calculate the MIRR of the project using the discounting approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the MIRR of the project using the reinvestment approach. (Do not round intermediate colculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. Calculate the MIRR of the project using the combination approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) % a. Discounting approach MIRR b. Reinvestment approach MIRR % C. Combination approach MIRRDuo Corporation is evaluating a project with the following cash flows: Year 0 PO12345 Cash Flow -$ 29,300 11,500 14,200 16,100 13,200 -9,700 The company uses a discount rate of 11 percent and a reinvestment rate of 8 percent on all of its projects. a. Calculate the MIRR of the project using the discounting approach. (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the MIRR of the project using the reinvestment approach. (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. Calculate the MIRR of the project using the combination approach. (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Discounting approach MIRR b. Reinvestment approach MIRR c. Combination approach MIRR % % %
- Company Z is considering a project that has the following cash flow data. Assuming a WACC of 8.0%, what is the project's discounted payback period? Year 0 1 2 3 Cash Flow -900 425 425 425 Group of answer choices 3.08 2.61 2.42 2.78 2.18ABC Company is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? Note that the company uses its WACC for the required rate of return. WACC: 10.00% Year 0 1 2 3 Cash flows -$950 $500 $500 $500Shannon Co. is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? WACC: 10.00% Year 0 1 2 3 4 Cash flows -$950 $525 $485 $445 $405 2.44 years 1.79 years 2.22 years 1.61 years 1.99 years
- Doak Corp. is evaluating a project with the following cash flows: Year Cash Flow 0 -15,300 1 6,400 2 7,600 3 7,200 4 6,000 5 -3,400 The company uses an interest rate of 9 percent on all its projects. Calculate the MIRR of the project using all three methods. Discounting approach ____________% Reinvestment approach ___________% Combination approach ____________%Use the following information provided to answer the question below: INFORMATION Zeda Enterprises has the option to invest in machinery in projects A and B but finance is only available to invest in one of them. You ar given the following projected data: Initial cost Scrap value Depreciation per year Net profit Year 1 Year 2 Year 3 Year 4 Year 5 Net cash flows Year 1 Year 2 Year 3 Year 4 Year 5 Project A R300 000 R40 000 R52 000 R20 000 R30 000 R50 000 R60 000 R10 000 Project B R300 000 0 R60 000 R90 000 R90 000 R90 000 R90 000 R90 000Masulis Inc. is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? WACC: 10.75% Year 0 1 2 3 4 Cash flows -$975 $650 $610 $570 $530 a. 1.22 years b. 2.78 years c. 1.78 years d. 2.22 years e. 1.11 years Moerdyk & Co. is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. If the decision is made by choosing the project with the higher IRR, how much value will be forgone? Note that under certain conditions choosing projects on the basis of the IRR will not cause any value to be lost because the one with the higher IRR will also have the higher NPV, i.e., no conflict will exist. WACC: 8.75% 0 1 2 3 4 CFS -$775 $550 $390 $230 $70 CFL -$775 $115 $275 $435 $595 a. $0.00 b. $37.51 c. $34.49…