3 Doak Corp. is evaluating a project with the following cash flows. The company uses a discount rate of 9 percent and a reinvestment rate of 6 percent on all of its projects. Year Cash Flow -$15,200 1 6,300 2 7,500 7,100 5.900 5 - 3,300 Skipped UWN-O Calculate the MIRR of the project using all three methods with these interest rates. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) % Discounting approach Reinvestment approach Combination approach % 6 Crenshaw Enterprises has gathered projected cash flows for two projects. Year Project 1 Project J 0 -$258,000-$258,000 1 114,200 89,800 2 104,600 99,800 3 88,600 101,800 4 77.600 108.800 Skipped > WN a. At what interest rate would the company be indifferent between the two projects? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. Which project is better if the required return is above this interest rate? a. Interest rate % b. Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: 00 Year Cash Flow 0-$582,000 1 212,000 2 155,000 3 220,000 199,000 Skipped 4 All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to Improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are "blocked" and must be reinvested with the government for one year. The reinvestment rate for these funds is 7 percent. Assume Anderson uses a required return of 13 percent on this project. a. What is the NPV of the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the IRR of the project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. NPV b. IRR % 9 Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$418,000 -$36,500 1 47,500 19,700 2 58,500 14.000 3 75,500 15,100 4 533,000 11,900 WN Skipped The required return on these investments is 14 percent a. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) d. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) e. Based on your answers in (a) through (d), which project will you finally choose? years years a. Project A Project B b. Project A Project B c. Project A Project B d. Project A Project B % e. 5 Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has historically used a three-year cutoff for projects. The required return is 14 percent. Year Project F Project G $143,000 $213,000 1 56,000 36,000 54,000 51,000 64,000 94,000 59,000 124,000 54,000 139,000 0 UWN a. Calculate the payback period for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. Calculate the NPV for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. Which project, if any, should the company accept? 2.52 years 3.26 years Project F Project G b. Project F Project G C. Harwell Company manufactures automobile tires. On July 15, 2018, the company sold 1,900 tires to the Nixon Car Company for $70 each. The terms of the sale were 3/10,n/30. Harwell uses the net method of accounting for cash discounts. Required: 1. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on July 23. 2018. 2. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on August 15, 2018. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on July 23, 2018. (If no entry is requ a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet WN a. At what interest rate would the company be indifferent between the two projects? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. Which project is better if the required return is above this interest rate? a. Interest rate % b. Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: 00 Year Cash Flow 0-$582,000 1 212,000 2 155,000 3 220,000 199,000 Skipped 4 All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to Improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are "blocked" and must be reinvested with the government for one year. The reinvestment rate for these funds is 7 percent. Assume Anderson uses a required return of 13 percent on this project. a. What is the NPV of the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the IRR of the project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. NPV b. IRR % 9 Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$418,000 -$36,500 1 47,500 19,700 2 58,500 14.000 3 75,500 15,100 4 533,000 11,900 WN Skipped The required return on these investments is 14 percent a. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) d. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) e. Based on your answers in (a) through (d), which project will you finally choose? years years a. Project A Project B b. Project A Project B c. Project A Project B d. Project A Project B % e. 5 Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has historically used a three-year cutoff for projects. The required return is 14 percent. Year Project F Project G $143,000 $213,000 1 56,000 36,000 54,000 51,000 64,000 94,000 59,000 124,000 54,000 139,000 0 UWN a. Calculate the payback period for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. Calculate the NPV for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. Which project, if any, should the company accept? 2.52 years 3.26 years Project F Project G b. Project F Project G C. Harwell Company manufactures automobile tires. On July 15, 2018, the company sold 1,900 tires to the Nixon Car Company for $70 each. The terms of the sale were 3/10,n/30. Harwell uses the net method of accounting for cash discounts. Required: 1. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on July 23. 2018. 2. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on August 15, 2018. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on July 23, 2018. (If no entry is requ a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet