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# Capital Budgeting

### Equivalent Annual Annuity

Two Projects with unequal length and cost of capital 10%. Which is the best project and please show the steps how to solve for equivalent annual annuity in unequal projects. Yr. 0 Project 1: (\$150,000) Project 2: (\$200,000) 1 \$80,000 \$40,000 2 \$60,000

### Net Present Value

If you have 4 projects with the following investment and Net Present Value in what order should you pick the projects. Project 1: Investment of \$160,000 and Net Present Value of \$30,000 Project 2: Investment of \$120,000 and Net Present Value of \$15,000 Project 3: Investment of \$110,000 and Net Present Value of \$25,000 P

### Strident Marks is considering purchasing new manufacturing equipment

Strident Marks is considering purchasing new manufacturing equipment that costs \$1,300,000 and is expected to improve cash flows by \$500,000 in year 1, \$350,000 in year 2, \$475,000 in year 3, \$450,000 in year 4, and \$300,000 in year 5. Calculate key financial metrics for this capital budgeting project. A 14% rate of return and a

### Capital Budgeting for Cash Flow Finance Project

Create an Excel spreadsheet for a production plant that the company will lease for 5 years at US\$1,500,000 per year; it will cost the firm US\$4,000,000 in capital (straight-line depreciation, 5 year life) in year 0; it will cost the firm an additional US\$150,000 per year after the new production plant is brought online for other

### Cost Accounting - Kaplin Inc

Two Problems are attached, I need to understand how to work them.

### Allied Food Products Integrated Case Study

? Read the Allied Food Products Integrated Case Study in Fundamentals of Financial ? Create a portfolio by answering questions a, b, c, and d about the case study. 11-12 Capital Budgeting and Cash Flow Estimation After seeing Snapple's success with noncola soft drinks and learning of Coke's and Pepsi's interest, Allied Foo

### A real estate investment requires an initial outlay of \$150,000 in cash.

Please help with this question. Net Present Value and Internal Rate of Return A real estate investment requires an initial outlay of \$150,000 in cash. The investment will return a single sum cash payment of \$606,796 after 10 years. The rate of return required on projects as risky as this one is 18%. 1. What is the net pre

### Capital Budgeting Concepts

What are the purposes of capital budgeting? What factors influence a capital budgeting analysis, and how do they influence it? How is capital budgeting used in most organizations? How does the time value of money influence financial decisions made by organizations? What are the merits of using the market capitalization

### What do you think comprises a cost benefit analysis?

1.What do you think comprises a cost benefit analysis? 2.What is an acceptable level of return on investment? Why? 3.How is decision making improved by data analysis? 4.How do you determine the types and sources of data used in developing the research proposal?

### Time Value of Money

Why is the time value of money so important in capital budgeting decisions?

### Discussion questions of Chapters 9-13 of Foundation of Financial Management by Block & Hirt 9th Edition

Hello, I am looking for answers to discussion questions of Chapters 9-13 of Foundation of Financial Management by Block & Hirt 9th edition. Many thanks in advance,

### Gardial Fisheries is considering 2 mutually exclusive investments.

This is a homework problem from ch. 10 of "Corporate Finance: A Focused Approach (2nd ed). Please use the attached template from same book Web site. I can not get same answers as given in class. Please explain steps/formulas, verbage etc in separate Word document if possible. Thank you. question 10-18: Gardial Fisherie

### IRR on an Investment/Cash Payback Period

Please help me with this: Bobs, Inc. is thinking about purchasing equipement costing \$30,000 with a 6-year useful life. The equipment will provide cost savings of \$7,300 and will be depreciated straight-line over its useful life with no salvage value. Bobs, Inc. requires a 10% rate of return. What is the approximate internal

### Evergreen Corp. has provided the following data

Please only do Questions 1-7 1. Evergreen Corp. has provided the following data: Sales per period 1,000 units Selling price \$40 per unit Variable manufacturing cost \$12 per unit Selling expenses \$5,100 plus 5% of selling price Administrative expenses \$3,000 plus 20% of selling price The number of u

### Land Valuation for Capital Budgeting Analysis

Please help me in solving the problem with the explanations and details. 1) Your company purchased a piece of land five years ago for \$150,000 and subsequently added \$175,000 in improvements. The current book value of the property is \$225,000. There are two options for future use of the land: 1) the land can be sold today f

### Net Present Value and Project Probability

17. Oxford Company has limited funds available for investment and must ration the funds among five competing projects. Selected information on the five projects follows: Project Investment Required Net Present Value Life of the Project (years) Internal Rate of Return (percent) A \$160,000 \$44,323 7 18% B \$135,000 \$42,0

### Capital Budgeting Project - Net Cash Flow, Incremental Cash Flows, NPV and IRR

POLO may upgrade its "modem pool." It last upgraded two years ago, when it spent \$115 million dollars on equipment with an assumed life of 5 years. The firm uses straight-line depreciation (to 0.00). The old equipment can be sold today for \$30 million. A new modem pool can be installed today for \$150 million. New equipment will

### Net present value, profitability index, and internal rate of return calculations. Break-even point. Break-even point and profit margin

9-6A. (Net present value, profitability index, and internal rate of return calculations) You are considering two independent projects, project A and project B. The initial cash outlay associated with project A is \$50,000 and the initial cash outlay associated with project B is \$70,000. The required rate of return on both project

### WACC - The Bigelow Company has a cost of equity of 12 percent, a pre-tax cost of debt of 7 percent, and a tax rate of 35 percent.

Please help with the WACC problems: The Bigelow Company has a cost of equity of 12 percent, a pre-tax cost of debt of 7 percent, and a tax rate of 35 percent. What is the firm's weighted average cost of capital if the debt-equity ratio is .60? 2. Carter & Carter (C&C) is considering a project that requires an initial

### Calculate the IRR, the NPV, and the MIRR

Project S has a cost of \$10,000 and is expected to produce cash flows of \$3,000 per year for 5 years. Project L costs \$25,000 and is expected to produce cas flows of \$7,400 per year for 5 years. Calculate the two projects' NPVs, IRRs, MIRRs, and PIs, assuming a cost of capital of 12 percent. Which project would be selected, a

### Cost Savings in Assembly Operations Analysis

Brown Company is considering two new machines that should produce considerable cost savings in its assembly operations. The cost of each machine is \$15,000 and neither is expected to have a salvage value at the end of a 4-year useful life. Brown's required rate of return is 12% and the company prefers that a project return its i

### ROI in its generic form is defined as

Here is the first half: .............................. 1 ROI in its generic form is defined as: a. Income divided by Sales b. Income divided by Total Costs c. Income divided by Investment d. Sales divided by Total Assets e. None of the Above are correct 2 Which of the following is a capi

### Find NPV and IRR for two projects.

Fred Jones, the financial manager of ABC Widgets is considering two different projects to undertake. Project A is not very risky, so Jones decides to discount its future cash flows at 12 percent. Project B is very risky, so Jones decides to discounts its cash flows at 14 percent. The NPV for project A is: ____________. The IRR f

### A Project's NPV and IRR

A company just paid \$10 million for a feasibility study. If the company goes ahead with the project, it must immediately spend another \$100 million now, and then spend \$20 million in one year. In two years it will receive \$80 million, and in three years it will receive \$90 million. If the cost of capital for the project is 11 pe

### Capital Structure for The Mallory Corporation

Please show intermediate steps and formulas. The Mallory Corporation has a weighted average cost of capital of 11.5%. The company's cost of equity is 16%, and its cost of debt is 8.5%. The tax rate is 35%. What is the firm's debt-equity ratio?

### Management is considering purchasing an asset for \$20,000 that would have a useful life of 10 years and no salvage value

Problem 1: Management is considering purchasing an asset for \$20,000 that would have a useful life of 10 years and no salvage value. For tax purposes, the entire original cost of the asset would be depreciated over 10 years using the straight-line method. The asset would generate annual net cash inflows of \$12,000 throughout its

### McKenzie Corporation's Capital Budgeting

Sam McKenzie is the founder and CEO of McKenzie Restaurants, Inc., a regional company. Sam is considering opening several new restaurants. Sally Thornton, the company's CFO, has been put in charge of the capital budgeting analysis. She has examined the potential for the company's expansion and determined that the success

### You are considering two independent projects, Project A and Project B.

1) You are considering two independent projects, Project A and Project B. The initial cash outlay associated with project A is \$ 50,000, and the initial cash outlay associated with project B is \$ 70,000. The required rate of return on both projects is 12%. The expected annual free cash inflows from each project are as follows:

### NPV, Payback Period and IRR

I need help calculating Net present value, IRR and the payback period: You are the finance manager for Smith & Comapny and you must decide among three projects. The CFO set the required rate of return at 12%. ? Project A has the following characteristics: \$100,000 initial cash outflow, five years of \$21,500 payments, and a s