Answer the following problem and provide solution each.

1. Cummings Product Co. is evaluating the two mutually exclusive projects and expected net cash flows are as follows: Year Project A Project B (P300 (P405) (387) 134 (193) 134 (100) 134 600 134 600 134 850 134 (180) 0 REQUIRED: cost of capital is 12% Solve: NPV; PP, IRR, PI & which project is accepted?Northwest Territories oil Exploration Company is considering two mutually exclusive plans for extracting on property for which it has mineral rights. Both plans call for the expenditure of P12M to drill development wells. Under Plan A, all the oil will be extracted in 1 year, producing a cash flow of P 14,400,000. Under Plan B, cash flows will be P2,100,000 per year for 20 years. Cost of Capital is 12%. REQUIRED: NPV, PP, IRR & PI. Which project should be accepted?1. John's Publishing co, a new service that writes term papers for college students. Each paper will cost P750 and authors will receive .50 cents in royalty for every paper sold. Marketing expenses are estimated to be P20,000 divided equally between year 1 and year 2. John's cost of capital is 11% and John pays all the manuscript for all writings of P100,000. Sales are as follows: m Volume 1 10,000 2 7,000 3 3,000 Compute: NPV; PP; IRR 1. After discovering a new gold vein in Colorado mountain, CTC Mining Corporation must decide whether to mine the deposit. To go ahead with extraction, the new equipment will cost P900,000 and P165,000 for its installation. The gold mined will net the firm an estimated P350,000 each year for 5 years life of the vein and cost of capital is 14%. Find the NPVand IRR. Is the project feasible? 1. You are the financial analyst for Damon Electric Company. The director of capital budgeting has asked you to analyse two proposed capital investments. Project X and Y. Each project has a cost of P10,000 and coupon rate is 12% . The expected cash flows are: Year Project X Project 1 6,500 3,500 2 3,000 3.500 3 3,000 3,500 4 1,000 3,500 Calculate: PP, NPV, IRR and PI and which of these 2 projects will be accepted ifthey are independent? 1. A company is analysing two mutually exclusive projects, M and R, whose cash flows are shown below: Year M R 0 - 1,000 -1,000 1 900 0 2 250 250 3 10 400 4 10 800 Compute: discounted payback period; profitability index; internal rate of return; NPV if hurdle rate is 12% . The company would like to replace the old machine that can be sold now at P16,000 with a book value of P15,000 subject to depreciation. Its economic life is comparable with the new machine that can be purchased at P50,000 which is 6 years. The new machine has a salvage value of P 5,000; needs additional transportation cost of P2,000 and installation cost 3% of its purchase price. Hopefully, this new machine can generate a taxable savings of P6,900 with a tax bracket of 34%. All inflows are subject to tax. Repairs of the old machine is P3,500. Required rate of return is 12%. . COMPUTE: NI; NACE; PP; NPV;PI; ARR and IRR10. You are trying to determine whether to expand your business by building a new manufacturing plan. The plant will cost P15 million which will be depreciated straight line over its four year. If the plant has projected net income of P1,938,200; P2,201,600; P1,876,000 and P1,329,500 respectively. What is average rate of return based on net investment and average net investment?. Compute discounted payback period and profitability index if cost of money is 12%\f1. You are currently evaluating a proposed project with a life of 3 years and will require the purchase of new capital equipment worth P175,000. In addition, the project will require initial P15,000 investment in supplies and spare parts for equipment, with 40% of this amount financed with trade credit at 5% interest rate annually. The expected sales for the first year will be P90,000 and cash operating expenses are P15,000.The new equipment will have 3 years life. At the end of 3 years, you expect to terminate the project and sell the equipment for P10,000. Sales and expenses are expected to increase by 40% every year. Marginal tax is 34% a. What is the net investment cash flow of this project? b. How much is the net cash flow forthe first year? 2nd year? 3rd year? c. Compute regular payback period and average rate of return based on net investment. d. How much is the total cash flow ofthe final year