Homework Answers
| year | Total | ||||||
| 0 | 1 | 2 | 3 | 4 | 5 | ||
| Estimated Costs | 175000 | 22500 | 22500 | 22500 | 22500 | 22500 | |
| Discount Factor | 1 | 0.917431 | 0.84168 | 0.772183 | 0.708425 | 0.649931 | |
| Discounted Costs | 175000.00 | 20642.20 | 18937.80 | 17374.13 | 15939.57 | 14623.46 | 262517.15 |
| year | Total | ||||||
| 0 | 1 | 2 | 3 | 4 | 5 | ||
| Estimated benefits | 80000 | 80000 | 80000 | 80000 | 80000 | ||
| Discount Factor | 1 | 0.917431 | 0.84168 | 0.772183 | 0.708425 | 0.649931 | |
| Discounted benefitss | 0.00 | 73394.50 | 67334.40 | 61774.68 | 56674.02 | 51994.51 | 311172.10 |
| Discounted (Benefits - Costs) | -175000.00 | 52752.29 | 48396.60 | 44400.55 | 40734.45 | 37371.05 |
| Cumulative (Benefits - Costs) | -175000.00 | -122247.71 | -73851.11 | -29450.56 | 11283.89 | 48654.95 |
Return on investment = net return on investment/Cost of investment*100
Net return on investment = (benefits - Costs)*No. of years - Cost of Investment
= (80000-22500)*5 - 175000
= 57500*5 - 175000
= 287500 - 175000
= 112500
Return on Investment = (112500/175000)*100
= 64.29%
Annualised Return = (1+0.6429)^(1/5) - 1
= 1.6429^(1/5) -1
= 1.104384 - 1
= 0.104384
= 10.44%
Calculation of NPV -
NPV is found by subtracting a projects initial investment from the present value of its cash inflows discounted at the firms cost of capital.
As calculated above
| Cumulative Benefits - Costs | -175000.00 | -122247.71 | -73851.11 | -29450.56 | 11283.89 | 48654.95 |
NPV = 48654.95
Simple payback = 175000/(80000-22500)
= 175000/57500
= 3.04 Years
Please check with your answer and let me know.
Add Answer to:
Question Two Using information about the estimated costs, estimated benefits and a discount rate of 9%...
Using information about the estimated costs, estimated benefits and a discount rate of 9% for Project...
Using information about the estimated costs, estimated benefits and a discount rate of 9% for Project XYZ, calculate the discount factor for each year, the discounted costs, the discounted benefits, the return-on-investment (ROI) and the net-present value (NPV). In which year does the payback occurs? Total | O 175,000 ? ? Estimated Costs Discount Factor Discounted Costs | 22.500,7 22,500 ? ? Year 2 | 22,500 ? ? 3 | 22,500 ? ? 4 22,500 ? ? | 5 |...
A project where the projected costs and benefits are spread over five years with the following...
A project where the projected costs and benefits are spread over five years with the following data: • Estimated costs are $100,000 in Year 1 and $25,000 each for years 2, 3, 4, and 5. • Estimated benefits are $0 in Year 1 and $80,000 each for years 2, 3, 4, and 5. • Use a discount rate of 8% 1.Calculate the following: a. Calculate cash flow b. Show the discount factor c. Show discounted costs and discounted benefits d....
What is the estimated payback period of a project whose cost is $90,000 and benefits estimated...
What is the estimated payback period of a project whose cost is $90,000 and benefits estimated to be $30,000 in each of the next five years? _________________ years If the cumulative net inflow for a project is ($500), and in the next year, inflows total $800 and outflows total $100, what is the cumulative net inflow at the end of the next year? Assuming a 10 percent discount rate, calculate the net present value (NPV) of the following cash flows...
I could really use some help with this system analysis question I got. Thank you!!!! Using...
I could really use some help with this system analysis question
I got. Thank you!!!!
Using the following data, create a table similar to the one at the
bottom of the page. Note that there are 8 years of data here vs. 5
years in the table. You will have to add the extra 3 years to your
table. There is also a different discount factor for each
year.
Calculate the net present value, the payback period, and the return...
a project where the projected costs and benefits are spread over five years with the following...
a project where the projected costs and benefits are spread over five years with the following data: • Estimated costs are $100,000 in Year 1 and $25,000 each for years 2, 3, 4, and 5. • Estimated benefits are $0 in Year 1 and $80,000 each for years 2, 3, 4, and 5. • Use a discount rate of 8% Calculate the Return on Investment and Payback for the project.
Which of the following is the discount rate that makes the present value of the estimated cash flows equal to the initia...
Which of the following is the discount rate that makes the present value of the estimated cash flows equal to the initial cost of the investment? Modified internal rate of return Internal rate of return Discounted payback period Payback period Net present value
software company is evaluating the following projects with estimated cash flow (in $): Year (t) Project...
software company is evaluating the following projects with estimated cash flow (in $): Year (t) Project A Project B Project C 0 -100,000 -100,000 -120,000 1 30,000 30,000 40,000 2 40,000 30,000 40,000 3 40,000 30,000 40,000 4 40,000 30,000 40,000 5 100,000 130,000 120,000 Calculate the net profit, payback period, return on investment (ROI), and net present value (NPV) of all projects. Discount rate= 3.00% a) Show your calculated discount rate and fill in the table. Project A Project...
Internal Rate of Return (IRR) can be understood as the discount rate that should be applied...
Internal Rate of Return (IRR) can be understood as the discount rate that should be applied to a project such that Net Present Value (NPV) = $0. If the discount rate applied in a certain 5 year project is 10%, the resultant NPV is $50K, and the cost is $100K, what is the IRR? (Assume that all costs for the project are incurred at the start of the project, and the payout for this project occurs in one payment at...
Internal Rate of Return (IRR) can be understood as the discount rate that should be applied...
Internal Rate of Return (IRR) can be understood as the discount rate that should be applied to a project such that Net Present Value (NPV) = $0. If the discount rate applied in a certain 5 year project is 10%, the resultant NPV is $50K, and the cost is $100K, what is the IRR? (Assume that all costs for the project are incurred at the start of the project, and the payout for this project occurs in one payment at...
XYZ Ltd is a company that is considering two alternative investments: Project A that would cost...
XYZ Ltd is a company that is considering two alternative investments: Project A that would cost £40,000 and Project B that would cost £39,000.The chosen project would commence on 1 January next year ('Year 1'), when the initial investment would be made.As a result of the investment,SettloxLtd can expect to increase its cash flows over the life of the project by the following predicted amounts: Year Project C (£) Project D (£) 1 10,000 16,000 2 12,000 4,000 3 21,000...
Using information about the estimated costs, estimated benefits and a discount rate of 9% for Project XYZ, calculate the discount factor for each year, the discounted costs, the discounted benefits, the return-on-investment (ROI) and the net-present value (NPV). In which year does the payback occurs? Total | O 175,000 ? ? Estimated Costs Discount Factor Discounted Costs | 22.500,7 22,500 ? ? Year 2 | 22,500 ? ? 3 | 22,500 ? ? 4 22,500 ? ? | 5 |...
I could really use some help with this system analysis question
I got. Thank you!!!!
Using the following data, create a table similar to the one at the
bottom of the page. Note that there are 8 years of data here vs. 5
years in the table. You will have to add the extra 3 years to your
table. There is also a different discount factor for each
year.
Calculate the net present value, the payback period, and the return...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago