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I just want the Cumulative NPV diagram required in the qs i have solution for this qs i just want diagram according to this solution:

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I just want the Cumulative NPV diagram required in the qs i have solution for this qs i just want diagram according to this solution:

image text in transcribed

image text in transcribed

3. An investment opportunity has projected costs and revenues as shown on the diagram in thousands of dollars. Year 1 2 3 4 5 6 Revenue $ 200 $ 250 $ 575 $ 600 $ 600 $ 600 Costs -$ 450 - $ 300 $ 450 - $ 225 - $ 150 - $ 150 - $ 250 The investor's minimum rate of return is 12% compounded annually. Calculate the project before-tax cash flow and then determine the ROR, NPV, PI, and Growth ROR forthe project using the 6-year evaluation life. Then develop the cumulative NPV diagram and indicate the project maximum capital exposure, discounted payback, and NPV on your diagram. Following are the detailed solutions through the excel sheet to the questions asked above: Rate of Return 12% ROR 22% Year 0 1 2 3 4 5 6 Revenue 200 250 575 600 600 600 Cost -450 -300 -450 -225 -150 -150 -250 Project Cash Flow before tax (Inflow -Out flow) -450 -100 -200 350 450 450 350 NPV Calculation -450 -89 -159 249 286 255 177 269 For NPV = 0 -450 -81.9001 -134.152 192.2742 202.465 165.819 105.6268 0.13 a. Project cash flow before tax is given in the above table under the sub-title "Project cash flow before tax (inflow -out flow). b. ROR (Rate of Return) is the rate at which NPV (Net present value) is zero. So here it is 22.1 % (mentioned under the heading of ROR. c. Pl is the profitability index = present value of all future cash flows / Initial investment 719 / 450 = 1.60 Present value of Future cash flows -89 -159 249 286 255 177 Total 719 d. Growth Rate = (Ending value/beginning value)^(1/6) - 1 (350/450)^(1/6) - 1 So, Growth rate = 11.5% e. Project maximum capital exposure is on Year 4. f. Discount payback period is the period which corresponds to breakeven position where there is no profit and no loss which is 4.75 years i.e. between Year 4 and Year 5. g. NPV calculation is already mentioned in the above table. Hope this clarifies the query. 3. An investment opportunity has projected costs and revenues as shown on the diagram in thousands of dollars. Year 1 2 3 4 5 6 Revenue $ 200 $ 250 $ 575 $ 600 $ 600 $ 600 Costs -$ 450 - $ 300 $ 450 - $ 225 - $ 150 - $ 150 - $ 250 The investor's minimum rate of return is 12% compounded annually. Calculate the project before-tax cash flow and then determine the ROR, NPV, PI, and Growth ROR forthe project using the 6-year evaluation life. Then develop the cumulative NPV diagram and indicate the project maximum capital exposure, discounted payback, and NPV on your diagram. Following are the detailed solutions through the excel sheet to the questions asked above: Rate of Return 12% ROR 22% Year 0 1 2 3 4 5 6 Revenue 200 250 575 600 600 600 Cost -450 -300 -450 -225 -150 -150 -250 Project Cash Flow before tax (Inflow -Out flow) -450 -100 -200 350 450 450 350 NPV Calculation -450 -89 -159 249 286 255 177 269 For NPV = 0 -450 -81.9001 -134.152 192.2742 202.465 165.819 105.6268 0.13 a. Project cash flow before tax is given in the above table under the sub-title "Project cash flow before tax (inflow -out flow). b. ROR (Rate of Return) is the rate at which NPV (Net present value) is zero. So here it is 22.1 % (mentioned under the heading of ROR. c. Pl is the profitability index = present value of all future cash flows / Initial investment 719 / 450 = 1.60 Present value of Future cash flows -89 -159 249 286 255 177 Total 719 d. Growth Rate = (Ending value/beginning value)^(1/6) - 1 (350/450)^(1/6) - 1 So, Growth rate = 11.5% e. Project maximum capital exposure is on Year 4. f. Discount payback period is the period which corresponds to breakeven position where there is no profit and no loss which is 4.75 years i.e. between Year 4 and Year 5. g. NPV calculation is already mentioned in the above table. Hope this clarifies the query

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