Question
Q2: BASF Group has opportunity to use the Retained Earnings (€42056: as shown in the balance...
Q2: BASF Group has opportunity to use the Retained Earnings (€42056: as shown in the balance sheet 2019) to invest in new project, the following is the cash flow expected in the upcoming for years. (K: discounted rate: 13%)
|
Year |
Cost |
Cash-In-Flow |
|
0 |
42056 |
------ |
|
1 |
----- |
10,000 |
|
2 |
----- |
15,000 |
|
3 |
----- |
17,000 |
|
4 |
----- |
20,000 |
- Calculate NPV net present value for this project, and give them an advice to invest or no, explain your answer?
Answer:
|
Year |
Cost |
Cash-In-Flow |
P.V.C.F |
|
|
0 |
||||
|
1 |
||||
|
2 |
||||
|
3 |
||||
|
4 |
||||
|
Total P.V.C.F = = |
||||
NPV = (1 Mark)
Advise (1 Mark)
Homework Answers
Answer #1
SEE THE IMAGE. ANY DOUBTS,
FEEL FREE TO ASK. THUMBS UP PLEASE
Not the answer you're looking for?
Similar Questions
Marge Simpson Inc. has following business opportunities with following cash flow information. Assume Marge’s opportunity cost...
Marge Simpson Inc. has following business opportunities with
following cash flow information. Assume Marge’s opportunity cost of
capital is 12%.
Year
Project A
Project B
0
−$20,000
−$20,000
1
15,000
2,000
2
15,000
2,500
3
13,000
3,000
4
3,000
50,000
Calculate payback period for both projects.
. Calculate the IRR and NPV for the following cash flows. Assume a 15% discount rate...
. Calculate the IRR and NPV for the following cash flows. Assume
a 15% discount rate
Year
Project 1
Cash flow
Project 2
Cash flow
0
-$20,000
-$20,000
1
1,000
12,000
2
3,000
15,000
3
4,000
3,000
4
12,000
4,000
5
15,000
1,000
9. If your tenant pays you rent of $24,000 a year for 10 years,
what is the present value of the series of payments discounted at
10% annually?
10. You are going to invest $300,000 in a...
Marge Simpson Inc. has following business opportunities with following cash flow information. Assume Marge’s opportunity cost...
Marge Simpson Inc. has following business opportunities with
following cash flow information. Assume Marge’s opportunity cost of
capital is 12%.
Year
Project A
Project B
0
−$20,000
−$20,000
1
15,000
2,000
2
15,000
2,500
3
13,000
3,000
4
3,000
50,000
Calculate profitability index for both projects.
Calculate payback period for both projects.
Marge Simpson Inc. has following business opportunities with following cash flow information. Assume Marge’s opportunity cost...
Marge Simpson Inc. has following business opportunities with
following cash flow information. Assume Marge’s opportunity cost of
capital is 12%.
Year
Project A
Project B
0
−$20,000
−$20,000
1
15,000
2,000
2
15,000
2,500
3
13,000
3,000
4
3,000
50,000
Calculate NPV for both projects.
Calculate IRR for both projects (Hint: the equation of
calculating IRR).
Calculate profitability index for both projects.
Calculate payback period for both projects.
Which business opportunity is better? Use
IRRA=54.7%, IRRB=33.3%, cross over
point=14.1%. (Hint:...
ABC Telecom has to choose between two mutually exclusive projects. If it chooses project A, ABC...
ABC Telecom has to choose between two mutually exclusive
projects. If it chooses project A, ABC Telecom will have the
opportunity to make a similar investment in three years. However,
if it chooses project B, it will not have the opportunity to make a
second investment. The following table lists the cash flows for
these projects. If the firm uses the replacement chain (common
life) approach, what will be the difference between the net present
value (NPV) of project A...
Firm Y has the opportunity to invest in a new venture. The projected cash flows are...
Firm Y has the opportunity to invest in a new venture. The
projected cash flows are as follows:
Year 0: Initial cash investment in the project of $300,000.
Years 1, 2, and 3: Generate cash revenues of $50,000.
Years 1, 2, and 3: Incur fully deductible cash expenditures of
$30,000.
Year 3: Incur nondeductible cash expenditure of $10,000.
Year 3: Receive $300,000 cash as a return of the initial
investment.
Assuming a 6 percent discount rate and a 30 percent...
A five - year project has a projected net cash flow of $15,000, $25,000, $30,000, $35,000,...
A five - year project has a projected net cash flow of $15,000,
$25,000, $30,000, $35,000, and $20,000 in the next five years. It
will cost $80,000 to implement the project. If the required rate of
return is 20%, conduct a discounted cash flow calculation to
determine the NPV and indicate if you would recommend this
project.
Globex Corp. has to choose between two mutually exclusive projects. If it chooses project A, Globex...
Globex Corp. has to choose between two mutually exclusive
projects. If it chooses project A, Globex Corp. will have the
opportunity to make a similar investment in three years. However,
if it chooses project B, it will not have the opportunity to make a
second investment. The following table lists the cash flows for
these projects. If the firm uses the replacement chain (common
life) approach, what will be the difference between the net present
value (NPV) of project A...
You are offered an investment opportunity that costs you $175,000, has an NPV of ($364.86), lasts...
You are offered an investment opportunity that costs you
$175,000, has an NPV of ($364.86), lasts for ten years,
has an interest rate of 10% and produces the following cash flow
stream:
Year Cash Flow
0 ($175,000)
1 - 3 $10,000
4 - 6 $50,000
7 ?
8 - 10 $15,000
Required: Determine the value of the cash flow in year 7
4. Unequal project lives Smith and Co. has to choose between two mutually exclusive projects. If...
4. Unequal project lives
Smith and Co. has to choose between two mutually exclusive
projects. If it chooses project A, Smith and Co. will have the
opportunity to make a similar investment in three years. However,
if it chooses project B, it will not have the opportunity to make a
second investment. The following table lists the cash flows for
these projects. If the firm uses the replacement chain (common
life) approach, what will be the difference between the net...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 5 minutes ago
asked 12 minutes ago
asked 12 minutes ago
asked 15 minutes ago
asked 18 minutes ago
asked 22 minutes ago
asked 33 minutes ago
asked 46 minutes ago
asked 55 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago