Charlie has a project for which he had determined a present worth of $56, 159. He now has to calculate the IRR for the project, but unfortunately he has lost complete information about the cash flows. He knows only that the project has a five-year service life and a first cost of $180,000, that a set of equal cash flows occurred at the end of each year, and that the MARR used was 10 percent. What is the IRR for this project?
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- The Sampson Company is considering a project that requires an initial outlay of $75,000 and produces cash inflows of $20,806 each year for five years. Sampson's cost of capital is 10%. Calculate the project's IRR recognizing the fact that the cash inflows are an annuity. Is the project acceptable? Did your calculation in this part result in any number(s) that were also calculated in part a? What is it about this problem that creates this similarity? Will this always happen in such cases? What is the project's NPV? Is it acceptable according to NPV rules?Mountain Frost is considering a new project with an initial cost of $205,000. The equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. The projected net income for each year is $20,000, $20,900, $24,600, and $16,900, respectively. What is the average accounting return? Please make sure its correctMargaret has a project with a $30560 first cost that returns $4320 per year over its 10-year life. It has a salvage value of $3000 at the end of 10 years. If the MARR is 5 percent, what is the payback period of this project if cash flow is continuous?
- The Gamma Inc. is planning to spend P600,000 for a machine that will depreciate on a straight-line basis over a ten-year period with no terminal disposal price. The machine will generate cash flow from operations of P120,000 a year. Ignoring income taxes, what is the accounting rate of return on the net initial investment? (in percentage)Tom is evaluating a project that costs $3, 500, 000, has a five-year life, and has no salvage value. Assume that depreciation is straight - line to zero over the life of the project. Sales are projected at 125, 000 units per year, price per unit is $65, variable cost per unit is $40, and fixed costs are $2 million per year. The tax rate is 21%, and the required rate of return on the project is 10%. Calculate the annual operating cash flow for the project. (Round to 2 decimals) Calculate the NPV for the project. (Round to 2 decimals) Calculate the accounting break - even number of units for the project. (Round to 2 decimals) Calculate the equivalent annual cost for the project. (Enter a positive value and round to 2 decimals)You are looking at a project analysis, which yields a net present value of $ 18,829. The project analyst, however, failed to consider working capital requirements in calculating the net present value. (The working capital investment needed is $ 10,000 initially, and will increase by $ 4,641 over the next five years, but the entire amount of $14,641 will be salvaged at the end of the fifth year. The entire amount will be salvaged at the end of the project life, and the discount rate is 10%). What effect will considering working capital have on the net present value? Also, Explain how NPV would be affected when Net working operating capital is included in the capital budgeting of above project verses NPV calculation when net working operating capital is NOT included in this capital budgeting example of above project
- A project with an initial cost of $81,000 is expected to produce cash flows of $20,000 per year and net income of $9,000 for each of the next 7 years. The asset has an estimated 7-year life and a $4,000 salvage value. What is the projected payback period? From what I read, answer is supposed to be initial cost divided by cashflows per year but all the other data in the question is confusing me. Please help if possible. Thank you.The Jensen Company has compiled the following information about a project they are considering. Initial cost: $500,000, to be depreciated straight line over 5 years Operating Cash Flows for Years 1-5: $50,000, $125,000, $220,000, $250,000, $125,000 What is the internal rate of return (IRR) on this project?Mountain Frost is considering a new project with an initial cost of $180,000. The equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. The projected net income for each year is $19,500, $20,400, $24,600, and $16,400, respectively. What is the average accounting return?
- A 3-year project requires the purchase of a machine (fixed asset) for $6,000 in Year 0. In Year 2, the project is expected to have net income of $2,000 and the depreciation rate is 45%. The tax rate is 35%. There is no interest expense. What is the Operating Cash Flow in Year 2? Enter your answer without the dollar sign and round your final answer to the nearest whole number (nearest dollar).Pam's Company estimates the following cash flows and depreciation on a project that will cost $200,000 and will last 10 years with no salvage value: Sales revenue $80,000 Salary expense $32,000 Depreciation expense 20,000 Miscellaneous expenses 8,000 Net Income $20,000 Instructions (a) Calculate the expected annual rate of return on this project showing calculations to support your answer. (b) Calculate the cash payback on this project showing calculations to support your answer.Stu is working on a bid for a contract. Thus far, he has determined that he will need $218,000 for fixed assets and another $41,000 for net working capital at Time 0. He had also determined that he can recover $79,900 aftertax for the combined fixed assets and net working capital at the end of the 3-year project. What operating cash flow will be required each year for the project to return 14 percent in nominal terms?