Please do not give solution in image format thanku The following table contains information about four potential investment projects that Castle Corporation is considering.RequiredInvestment$ 780,000PaybackPeriod3.84.23.93.1ProjectABCD$ 1,030,000$ 1,280,000$1,700,000.Project Life5.Required 11st preferred2nd preferred3rd preferred4th preferredARR30.00%19.50%15.00%17.70%Required:1. Rank the four projects in order of preference under each method indicated by the headers:2. Which method is the best for evaluating the investments?Complete this question by entering your answers in the tabs below.NPV$346,750Required 2Rank the four projects in order of preference under each method indicated by the headers:AccountingRate of ReturnPayback Net PresentPeriodValueProfitabilityIndexRequired 1$366,562$ 218,420$247,758Required 2 >Profitability Index2.662.101.491.44 The following table contains information about four potential investment projects that Castle Corporation is considering.RequiredInvestment$ 780,000$1,030,000$ 1,280,000$ 1,780,000ProjectABCDProject Life54ARR30.00⁰19.5015.0017.70%Required 1Required 2Which method is the best for evaluating the investments?Which method is the best for evaluating the investments?< Required 1PaybackPeriod3.84.23.93.1Required:1. Rank the four projects in order of preference under each method indicated by the headers:2. Which method is the best for evaluating the investments?Complete this question by entering your answers in the tabs below.NPV$ 346,750$366,562$ 218,420$ 247,758Required 2Profitability Index2.662.101.491.44

Organizations analyze and choose investment projects that need sizable capital expenditures using…

The following table contains information about four potential investment projects that Castle Corporation is considering. Required Investment $ 780,000 $ 1,030,000 C$ 1,280,000 D $ 1,700,000 Project A B Project Life 5 4 1st preferred 2nd preferred 3rd preferred 4th preferred ARR 30.00% 19.50% 15.00% 17.70% Payback Period 3.8 4.2 3.9 3.1 Required: 1. Rank the four projects in order of preference under each method indicated by the headers: 2. Which method is the best for evaluating the investments? Complete this question by entering your answers in the tabs below. NPV $ 346,750 $366,562 $ 218,420 $ 247,758 Required 1 Required 2 Rank the four projects in order of preference under each method indicated by the headers: Accounting Rate of Return Payback Net Present Period Value Profitability Index < Required 1 Required 2 > Profitability Index 2.66 2.10 1.44

The following table contains information about four potential investment projects that Castle Corporation is considering. Required Investment $ 780,000 $ 1,030,000 C$ 1,280,000 D $ 1,700,000 Project A B Project Life 5 4 1st preferred 2nd preferred 3rd preferred 4th preferred ARR 30.00% 19.50% 15.00% 17.70% Payback Period 3.8 4.2 3.9 3.1 Required: 1. Rank the four projects in order of preference under each method indicated by the headers: 2. Which method is the best for evaluating the investments? Complete this question by entering your answers in the tabs below. NPV $ 346,750 $366,562 $ 218,420 $ 247,758 Required 1 Required 2 Rank the four projects in order of preference under each method indicated by the headers: Accounting Rate of Return Payback Net Present Period Value Profitability Index < Required 1 Required 2 > Profitability Index 2.66 2.10 1.44

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 15.3.1P

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The following table contains information about four potential investment projects that Castle Corporation is considering. Required Investment $640,000 Payback Project A Project Life ARR Period 5 19.50% 3.9 B $ 890,000 4 17.75% 3.5 с $ 1,140,000 4 10.75% 3.2 NPV $203,250 $193,062 $ 216,670 Profitability Index 2.88 1.22 1.35 D $ 1,640,000 5 12.45% 3.8 $ 246,008 1.30 Required: 1. Rank the four projects in order of preference under each method indicated by the headers: 2. Which method is the best for evaluating the investments? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Rank the four projects in order of preference under each method indicated by the headers: 1st preferred 2nd preferred 3rd preferred 4th preferred Accounting Rate of Return Payback Period Net Present Value Profitability Index
Data pertaining to investment proposals is provided below: A B D -$40,000 $57,600 $17.600 Investment required -$260,000 $505,900 $245.900 -$125,000 -$640,000 $224,300 $99.300 6. Present vahue of cash inflows $1.021,400 NPV Usefil lfe of the project $381.400 6 Calculate project profitability index to rank proposals in tem of preference. Answer Choices: Project Investment profitability a. proposal Rank index preference 0.95 0.44 0.79 0.60 A 1st B 4th 2nd 3rd Project Investment profitability ь. proposal Rank preference 1.95 index A 1st B 1.44 4th 1.79 1.60 2nd D 3rd Project Investment profitability proposal Rank index preference 0.49 0.31 A 1st B 4th 0.44 2nd 0.37 3rd Project Investment profitability d. proposal Rank index preference A 1.45 1st B 0.94 4th 1.29 1.10 2nd 3rd D
You are given the following data for a project that is to be evaluated using the APV method. Year EBIT CAPEX 0 O $201.765 O $193,822 O $185,617 O $222,872 O $213,918 1 $127.000 $60,000 2 Depreciation Increase in NWC Year-end net debt $80,000 Cost of net debt = 8% Unlevered cost of capital = 11.8% Corporate tax rate = 30% Calculate the total value of the project at t = 0. using the APV method. $72,000 $50,000 $100,000 $133,000 $40,000 $80,000 $60,000 $140,000 3 $138.500 $10,000 $84,000 $30,000 $140,000
Whispering Inc. now has the following two projects available: Project Initial CF After-tax CF1 After-tax CF2 1 2 PMT1 PMT2 $ $ -11,634.42 Project 1 -3,290.48 5,300 3,800 Assume that RF = 5.1 percent, risk premium = 10.6 percent, and beta = 1.2. Use the EANPV approach to determine which project Whispering Inc. should choose if they are mutually exclusive. (Round cost of capital and final answers to 2 decimal places, e.g.17.35% or 2,513.25.) 1673.12 1479.74 6,200 should be chosen. 3,200 After-tax CF3 9,600
The management of Revco Products is exploring four different investment opportunities. Information onthe four projects under study follows:Project Number1 2 3 4Investment required ....................... $(270,000) $(450,000) $(360,000) $(480,000)Present value of cashinfl ows at a 10%discount rate .............................. 336,140 522,970 433,400 567,270Net present value .......................... $ 66,140 $ 72,970 $ 73,400 $ 87,270Life of the project ........................... 6 years 3 years 12 years 6 yearsInternal rate of return ..................... 18% 19% 14% 16%The company’s required rate of return is 10%; thus, a 10% discount rate has been used in the present valuecomputations above. Limited funds are available for investment, so the company can’t accept all of theavailable projects.Required:1. Compute the project profitability index for each investment project.2. Rank the four projects according to preference, in terms of:a. Net present valueb. Project profitability…
Q5. Consider the investment projects given in the following table: Net Cash Flow n Project A Project B Project C - $100 - S150 - $10 1 30 50 410 2 50 50 -558 3 50 252 4 50 21.11% Assume that MARR = 12% in the following questions: IRR 23.24% 20%, 40%, 50% Identify simple and non-simple projects. Identify pure and mixed investments. Determine the IRR for Project C. (Hint: You can use trial-error method followed by linear interpolation.) Which project(s) is(are) acceptable? b) c) d)
Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project Required: 1. Compute the project profitability index for each investment proposal. (Round your answers to 2 dec 2. Rank the proposals in terms of preference. Propoza! A B C D COLONINST Index $(60,000) $(130,000) $(140,000) $(2,100,000) 86,600 181,100 213,900 2,803, 200 703,200 $ 26,600 $ 51,100 $ 73,900 $ 5 years 7 years 6 years 6 years Kana Preference Q Search k < Prev D 4 of 7 SUS N THE
Based on the parameters calculated, should this project goes ahead? Give your reasons for your answer. Economic Parameters Base case Project IRR Equity IRR NPV($millions)@12% Capital Expenditure($million) PayBack period (Year) WACC (Based on 75/25) 13.68 15.89 9,172,880 (85,000,000) 8.92 0.1246
The Company has three potential projects from which to choose. Selected information on each of the three projects follows: Project A Project B Project C Investment required $44,400 $55,700 $53,100 Net present value of project $49,100 $74,100 $69,100 Using the profitability index, rank the projects from most profitable to least profitable. A, B, C B, A, C B, C, A C, B, A
6 Lewis Services is evaluating six investment opportunities (projects). The following table reflects each project’s net present value NPV and the respective initial investments required. All of these projects are independent.Project NPV InvestmentI 2,500 2,500II 4,000 20,000III 7,500 30,000IV 8,000 40,000V 2,000 10,000VI 2,500 5,000Lewis has an investment constraint of P50,000. Which combination of projects would represent the optimal investment that should be recommended to Lewis Services’ management? Group of answer choices II, IV and III IV only I, IV and VI I, II, III, V, and VI I, III and IV I, II, III, IV, V, and VI I, III, and VI I, III, V, and VI
Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project 4 Required: 1. Compute the project profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. Investment Proposal A BUD C Project Profitability Index Investment Proposal A D $(106,000) $(116,000) $(86,000) $(144,000) 142,040 178,640 118,680 213,120 $36,048 $ 62,640 $ 32,680 $ 69,120 5 years 7 years years 6 years Rank Preference:
nuN-ntips%253A%252F%252Flms.mheducation.com%2521 Saved the Internal Rate Net Present Project Investment Required $160,000 $44 ,323 $135,000 $42,000 $100,000 Ş35,035 $175,000 $ 38,136 (years) of Return 18% Project Value A 7 16% 20% 12 7 D 3 228 The net present values above have been computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the project profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, project profitability index and internal rate of return. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the project profitability index for each project. (Round your answers to 2 decimal places.) Project Project Profitability Index tv MacBook Air 80 88 F2 F3 F4 F5 F6 F7 F9 F10 @ #3 $ % & 2 4 7 8. W E T Y D J K * CO 品: