![dejaproctor17](/avatars/27752.jpg)
dejaproctor17
26.06.2020 •
Business
Your division is considering two projects with the following cash flows (in millions): 0 1 2 3 Project A -$16 $7 $9 $10 Project B -$26 $14 $20 $11 What are the projects' NPVs assuming the WACC is 5%
Solved
Show answers
More tips
- F Food and Cooking How to Make Napoleon Cake: A Step-by-Step Guide...
- H Health and Medicine How to Increase Hemoglobin in the Blood...
- F Food and Cooking How to Make Chebureki: A Delicious Recipe for Russian Street Food...
- S Style and Beauty Ultimate Guide on How to Care for Suede Shoes...
- T Travel and tourism How to Use a Compass: A Beginner s Guide...
- D Dating, Love, Relationships Does a Person s Character Depend on the Color of Their Eyes?...
- F Food and Cooking Is it Really Possible to Cook Tasty Colored Cauliflower?...
- H Health and Medicine Why do our Joints Crack?...
- H Health and Medicine These Food Additives Can Do Significant Harm to Your Health...
- F Food and Cooking How to Choose the Right Olive Oil: A Comprehensive Guide...
Answers on questions: Business
- B Business Joaquin is offered vocational training that will cost $3,000 but will make him eligible for a promotion. joaquin is trying to decide whether to get the training or...
- B Business Stephen owns a chemical plant. he is glad that his primary stakeholders are satisfied with the company’s growth. however, he is concerned about pleasing the secondary...
- B Business 5. ¿Has tenido mentores (consejeros, orientadores, padres, maestros, etc), en la vida, crees que aportan algo para tu reflexión personal? ....
- B Business How to solve task issue mangement at workplace...
- B Business Mr. Benjamin salgado invested his savings to salgado and delgado construction corporation amounting to php500,000 in cash and equipment worth php250,000.00...
- B Business Summer, Inc. has been in business for 20 years. During that time the company has consistently used the LIFO inventory costing method. Because of inflation, prices...
- B Business At the beginning of Year 1, a company reported a balance in common stock of $166,000 and a balance in retained earnings of $66,000. During the year, the company issued...
- B Business The management at Mova Autos Inc. has realized that the company s sales have started to decline due to increasing competition. The management has been working on several...
- B Business Which agricultural system trapped many southern blacks in a cycle of debt and poverty despite their hard work? sharecropping farm alliances crop lien system homesteading...
- M Mathematics Find the slope of the line passing through the points (-5,1) and (2,4). Enter your answer in as a fraction....
Ответ:
NPV project A = $7.47 million
NPV project B = $14.98 million
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator:
For project A :
Cash flow in year 0 = -$16
Cash flow in year 1= $7
Cash flow in year 2 = $9
Cash flow in year 3 = $10
I = 5%
NPV = $7.47 million
For project B
Cash flow in year 0 = -$26
Cash flow in year 1 = $14
Cash flow in year 2 = $20
Cash flow in year 3 = $11
I = 5%
NPV = $14.98 million
To find the NPV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
Ответ:
net income should increase by $38,448
Explanation:
net purchases per day = $11,760
net purchases x 20 days = $11,760 × 20 = $235,200
interest expense = $235,200 × 10% = $23,520
the gross amount purchased during the 20 day period:
= (net purchases × 365) ÷ (1 - discount rate) = ($11,760 × 365 days) ÷ (1 - 0.02) = $4,292,400 / 98% = $4,380,000
lost discounts = $4,380,000 × 2% = $87,600
the after tax change in net income = ($87,600 - $23,520) × (1 - 40%) = $64,080 × 60% = $38,448