Question

For the project shown below , if MARR is 12% , answer the following : (a)...

For the project shown below , if MARR is 12% , answer the following :

(a) Draw cash-flow diagram

(b) What is the simple payback period

(c) Calculate the discounted payback period

(d) Is the projecr acceptable? Using IRR method

- Investment = $15,000

- Expected life = 6 years

- Saving (SV) = $ 2000

- Annual receipts ( returns ) = $ 11,000

- Annual expenses = $ 6000

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
11-1 If Company XYZ plans to invest in a project with initial capital outlay $52,125, annual...
11-1 If Company XYZ plans to invest in a project with initial capital outlay $52,125, annual net cash inflow $12,000 for 8 years, and discount rate 12%, what is the Company XYZ’s NPA? 11-2 For the Company XYZ’s same project as in 11-1, what is the IRR for the project? There are two projects: Project A and Project B Project A: CF0 = -6000; CF1-5 = 2000; I/YR = 14. Calculate NPV, IRR, MIRR, Payback period, and discounted payback period...
ABC company typically exhibits increasing net annual revenues over time. In the long run, an ABC...
ABC company typically exhibits increasing net annual revenues over time. In the long run, an ABC project may be profitable as measured by IRR, but its simple payback period may be unacceptable. Evaluate this ABC project using the IRR method when the company’s MARR is x1% per year. If the company’s maximum allowable payback period is three years. What is your recommendation? Capital Investment at time 0: $100,000 Net revenue in year k :$20,000+$10,000×(k-1) Market (Salvage) value: $X2 Useful life:...
Jubail Corporation has just purchased a new CAD Machine for $35,000 to replace old machine that...
Jubail Corporation has just purchased a new CAD Machine for $35,000 to replace old machine that had a salvage value of $ 15,000. The useful life of the new machine is 10 years. The machine generates annual sales of $10,000 and has annual maintenance cost of $5,000. Calculate the Payback period using Discounted Payback method, If Jubail's MARR (minimum acceptable rate of return) is 15%: A. 8.12 Years B. 6.57 Years C. 8.57 Years D. 11.05 Years
For the project shown in the following​ table, calculate the internal rate of return ​(IRR). Then​...
For the project shown in the following​ table, calculate the internal rate of return ​(IRR). Then​ indicate, for the​ project, the maximum cost of capital that the firm could have and still find the IRR acceptable. Initial investment ​(CF 0CF0​) ​$80,000 Year ​(t​) Cash inflows ​(CF Subscript tCFt​) 1 ​$25,000 2 ​$45,000 3 ​$30,000 4 ​$30,000 5 ​$15,000
Suppose your firm is considering investing in a project with the cash flows shown below, that...
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Time: 0 1 2 3 4 5 6 Cash flow: −$5,000 $1,200 $2,400 $1,600 $1,600 $1,400 $1,200 Use the IRR decision rule to evaluate this project. (Do not round intermediate calculations...
Suppose your firm is considering investing in a project with the cash flows shown below, that...
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 11 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3 and 3.5 years, respectively. Time: 0 1 2 3 4 5 Cash flow –$235,000 $65,800 $84,000 $141,000 $122,000 $81,200 Use the IRR decision rule to evaluate this project. (Do not round intermediate calculations and round...
Multiple choice: The IRR system of project evaluation for selecting one of two mutually exclusive projects...
Multiple choice: The IRR system of project evaluation for selecting one of two mutually exclusive projects a) has the disadvantage or ignoring future cash flows, similar to that of the discounted payback period rule. b) may give different results from NV if the two projects have a different scale of investment and cash flow returns. c) should always be used in conjunction with the discounted payback system of project evaluation. d) always provides at least one value for the IRR...
Suppose your firm is considering investing in a project with the cash flows shown below, that...
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 7 percent, and that the maximum allowable payback and discounted payback statistics for the project are 2.0 and 3.0 years, respectively. Time: 0 1 2 3 4 5 6 Cash flow: –$6,800 $1,010 $2,210 $1,410 $1,410 $1,210 $1,010 Use the IRR decision rule to evaluate this project. (Negative amount should be indicated...
Suppose your firm is considering investing in a project with the cash flows shown below, that...
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 10 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3.0 and 3.5 years, respectively. Time: 0 1 2 3 4 5 Cash flow: –$243,000 $66,600 $84,800 $141,800 $122,800 $82,000 Use the IRR decision rule to evaluate this project. (Do not round intermediate calculations and round...
Suppose your firm is considering investing in a project with the cash flows shown below, that...
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Time: 0 1 2 3 4 5 6 Cash flow: −$5,000 $1,200 $2,400 $1,600 $1,600 $1,400 $1,200 Use the payback decision rule to evaluate this project. (Round your answer to 2...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT