Chrome File View History Bookmarks Profiles Tab Window Help Q 8 @ Thu Aug 3 10:17:20 PM M Question 1 - Chapter 11 Assign X + Untitled spreadsheet - Google X + C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253%252F%252Fnewconnect.mheducation.com%252F#/activity/question-g... dj O C Chapter 11 Assignment i Saved Help Save & Exit Submit Check my work - .. - . .-. Initial investment (2 limos) $ 840, 000 Useful life 10 years Salvage value $ 120, 000 Annual net income generated $ 70, 560 10 LLT's cost of capital 14 points Assume straight line depreciation method is used. Required: eBook Help LLT evaluate this project by calculating each of the following: 1. Accounting rate of return. 2. Payback period. Hint 3. Net present value. (Future Value of $1,Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. 4. Without making any calculations, determine whether the IRR is more or less than 14%. Print Complete this question by entering your answers in the tabs below. References Required 1 Required 2 Required 3 Required 4 Calculate accounting rate of return. Note: Round your answer to 1 decimal place. Accounting Rate of Return % Required 1 Required 2 > Mc Graw Prey 1 of 6 Next > HillComplete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate payback period. Note: Round your answer to 2 decimal places. Payback Period years Required 1 Required 2 Required 3 Required 4 Calculate net present value. Note: Cash Outflows and negative amounts should be indicated by a minus sign. Round your "Present Values" to the nearest whole dollar amount. Table or Calculator Function: Cash Outflow (Beginning of the Year) n= i= % Present Value Table or Calculator Function: Cash Inflow (for Next 10 Years) 1= i= % Table Factor Present Value Table or Calculator Function: Cash Inflow (for 10th Year) n= i = % Table Factor Present Value Total Net Present Value Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Without making any calculations, determine whether the IRR is more or less than 14%. IRR M Question 2 - Chapter 11 Assign X + Untitled spreadsheet - Google X + C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/question-g... [dj OC Chapter 11 Assignment i Saved Help Save & Exit Submit Check my work 2 E11-5 (Static) Analyzing Relationship between Net Present Value and Internal Rate of Return [LO 11-3, 11- 4] 10 points Consider the relationship between a project's net present value (NPV), its internal rate of return (IRR), and a company's cost of capital. For each scenario that follows, indicate the relative value of the unknown. If cost of capital is unknown, indicate whether it would be higher or lower than the stated IRR. If NPV is unknown, indicate whether it would be higher or lower than zero. Project 1 is shown as an example. eBook Net Present Value Cost of Capital Internal Rate of Return Print Project 1 0 13 % 13 % Project 2 HillM Question 3 - Chapter 11 Assign X + Untitled spreadsheet - Google X + C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/question-g... dj * OC Chapter 11 Assignment i Saved Help Save & Exit Submit Check my work 3 E11-6 (Algo) Comparing Options Using Present Value Concepts [LO 11-S1] After hearing a knock at your front door, you are surprised to see the Prize Patrol from a large, well-known magazine subscription company. It has arrived with the good news that you are the big winner, having won $26 million. You have three options: 10 points a. Receive $1.3 million per year for the next 20 years. b. Have $9.5 million today. c. Have $3.5 million today and receive $1,000,000 for each of the next 20 years. eBook Your financial adviser tells you that it is reasonable to expect to earn 12 percent on investments. Required: Hint 1. Calculate the present value of each option. (Future Value of $1,Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) 2. Determine which option you prefer. Print Complete this question by entering your answers in the tabs below. References Required 1 Required 2 Calculate the pres the present value of each option. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. Round your final answer to the nearest whole dollar. Enter your answers in dollars, not in millions. Show less A Present Value Option A Option B Option C Mc Graw HillM Question 3 - Chapter 11 Assign X + Untitled spreadsheet - Google X + C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/question-g... dj * OC Chapter 11 Assignment i Saved Help Save & Exit Submit Check my work 3 E11-6 (Algo) Comparing Options Using Present Value Concepts [LO 11-S1] After hearing a knock at your front door, you are surprised to see the Prize Patrol from a large, well-known magazine subscription company. It has arrived with the good news that you are the big winner, having won $26 million. You have three options: 10 points a. Receive $1.3 million per year for the next 20 years. b. Have $9.5 million today. c. Have $3.5 million today and receive $1,000,000 for each of the next 20 years. eBook Your financial adviser tells you that it is reasonable to expect to earn 12 percent on investments. Required: Hint 1. Calculate the present value of each option. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) 2. Determine which option you prefer. Print Complete this question by entering your answers in the tabs below. References Required 1 Required 2 Determine which option you prefer. Determine which option you prefer Required 1 Required 2 3 - Mc Graw HillM Question 4 - Chapter 11 Assign X + Untitled spreadsheet - Google X + C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/question-g... (dj * O C Chapter 11 Assignment i Saved Help Save & Exit Submit Check my work 4 E11-8 (Algo) Comparing Projects Using Profitability Index [LO 11-6] 10 Shaylee Corporation has $2.00 million to invest in new projects. The company's managers have presented a number of possible points options that the board must prioritize. Information about the projects follows: Project A Project B Project C Project D Initial investment $ 427, 000 2, 000 $ 732, 000 $ 957, 000 Present value of future cash flows 777, 000 427, 000 1, 212, 000 1, 572, 000 eBook Required: 1. Is Shaylee able to invest in all of these projects simultaneously? Hint 2-a. Calculate the profitability index for each project. 2-b. What is Shaylee's order of preference based on the profitability index? Print Complete this question by entering your answers in the tabs below. References Req 1 Req 2A and 2B Is Shaylee able to invest in all of these projects simultaneously? Is Shaylee able to invest in all of these projects simultaneously? Req 1 Req 2A and 2B Mc Graw Hill2-A. Calculate the profitability index for each project. Note: Round your answers to 4 decimal places. 2-B. What is Shaylee's order of preference based on the profitability index? Profitability Index Rank Project A Project B Project C Project D Mc Graw HillComplete this question by entering your answers in the tabs below. Required 1 Required 2 Determine which option Tulsa should select? Determine which option Tulsa should select? M Question 6 - Chapter 11 Assign X + Untitled spreadsheet - Google X + C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/question-g... [dj * O C Chapter 11 Assignment i Saved Help Save & Exit Submit Check my work 6 E11-15 (Algo) Comparing Capital Budgeting Methods [LO 11-1, 11-2, 11-3, 11-4, 11-6] 10 The following table contains information about four potential investment projects that Castle Corporation is considering. points Required Payback Project Investment Project Life ARR Period NPV Profitability Index A $ 660, 000 21 . 008 3 .2 $ 223 , 750 1. 16 B $ 910, 000 18. 00% 3.6 $ 211, 562 2.22 UT ID ID UT eBook $ 1, 160, 000 10 .508 3. 3 $ 216, 920 1. 37 $ 1, 660, 000 13. 208 3. 7 $ 246, 258 1. 32 Required: Print 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? References 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: Accounting Payback Net Present Profitability Rate of Return Period Value Index 1st preferred 2nd preferred referred 4th preferred Required 1 Required 2 > Mc Graw HillComplete this question by entering your answers in the tabs below. Required 1 Required 2 Which method is the best for evaluating the investments? Which method is the best for evaluating the investments?