(M) Saarinen and sports and for several municipales roughout the Most part of the US Statypically contact with the municipality to provide and services for a period of 20 years. The fomhe contracts lined and required by allow) that has a lot five years. The 10 milion pendered to contenuti in negative cash flows the end of yes 10 and 15 This changing hewal cash flower the 20-year contra perted into the potential for me, Star's management as decided to the MRR To Welcons The anal cash inflows to Starbegningewanded trough a 20 are estimated to in on this does not reflect the cost of coming the land very five years) Star 10% discount to evaluate the new projects, so plans to desconhecco cosa every we years back to y single before taking the MRR What are the prend? www opportun? Why why not? . The price where doors and reducine pece The RIN and two decimal place) The Motte project with a discount rate of 10 Round to be decina pa bit good west oportunity for States? Why why not? Select best choice below) OA Yes the based on the because there and the more than the court rule and a posle OB. The project only worth besed on Rebeca Igreater than the discontate but the Miss than the discount date and the give OC No the project and wore based on any because the IR and the MRR scontate and the NPVM OD. The project based on the measure because and the IRR than the discourse but the NPV is positive This Question in of complete Thin Test: 20 pts po Compensive problem Carmen Technologies in partes a chance to the part of the US. The company markets technology and comes both in the and over the one with a spy tween the two channel of the company product range from a detection does and mapping with wormed monitoring station. The company recently began investigating the possibile acquisition of regional warehousing fact that could be used the stock rol shops and to make the firm's on amers The whose facility wodrandture of 251.000 for rented space in Oklahoma City Oloma, and would provide a ce of cash flow spanning the next 10 years. The estimated cash flows areas lewe The negative cash flow intelects the cost of a planned renovation and spansion of the facility Fly in year 10 mesto recovery of its investment at the dose of the consegna higher than cash flow Games discount rate of 124 percent in evaluating investment As a preminary step in analyzing the new investment Games management has decided to evaluate the projects anfipted payback period What the project's spected pack periode Game CEO questioned the most performing the analysis about the meaning of the payback period because som to ignore the fact that the project will provide cash flows over many years beyond the end of the payback period Specifically he wanted to know what settinformation the payback provides you were the analyst how would you respond to Mr Gaman? In the past Gammen's management relied almost exclusively on the IRR to make some choice However, in the stance the lead financial analyst on the project suggested that there may be a problem with the RR because the son on the cash flow changes three times were fe Calculate for the rolet Evaluate the NPV role of the red for discount resource 20 con 100 cent Does 2. Given the cash flow Information in the table the payback period of the projects Round in As a preliminary step in analyzing the new investment Garmer's management has decided to evaluate the projects and payback period. What is the projects expected payback period? Im Game CEO, questioned the analyst performing analysis about the meaning of the payback period because omstolore the fact that the project will provide cash flows over many years beyond the end of the payback period Spedicale Weed to know what is formation the payback provides you were the show would you spend to w Game? men management home on the Romans who wants the financial analyst on the projected that there may be rem with the FR because then the cath.flow change the time we Calefor the pred Nie of the project for conspector percent of 100 percent Does there appew to be a problem of Rs in this range of disco? c. Call the project NPV What does the NPV boicate about the potent created by the project to Me Game who NPV mean recognizing that he was trained as an engineer and has no formal business education a. Given the cash flow information in the table, the payback period of the project is years The payback method tells you: (Select the best choice below.) O A. what the rate of return is for the investment. B. how long it takes you to recover your outflows of cash. C. how much value you are adding or taking from the firm. customers. The warenouse tacity would require an experimure of >251 UU or a rented space in Ukianoma Chy. Ukianoma, and would follows !!! The negative cash flow in year 5 reflects the cost of a planned renovation and expansion of the facility Finally, in year 10 Garmen estima higher than usual cash flow Garmen uses a discount rate of 124 percent in evaluating its investments a. As a preliminary step in analyzing the new investment. Garmen's management has decided to evaluate the project's anticipated paybu the analyst performing the analysis about the meaning of the payback period because it seems to ignore the fact that the project will prov wanted to know what useful information the payback provides. If you were the analyst, how would you respond to Mr. Garmen? b. In the past, Garmen's management has relied almost exclusively on the IRR to make its investment choices. However, in this instanc IRR because the sign on the cash flows changes three times over its life. Calculate the IRR for the project. Evaluate the NPV profile of there appear to be a problem of multiple IRRs in this range of discount rates? c. Calculate the project's NPV. What does the NPV indicate about the potential value created by the project? Describe to Mr. Garmen business education years. (Round to two decimal places.) a. Given the cash flow information in the table, the payback period of the project is The payback method tells you: (Select the best choice below.) O A. what the rate of return is for the investment OB. how long it takes you to recover your outflows of cash. OC. how much value you are adding or taking from the firm, Click to select your answer(s) b. The projects IRR is % (Round to two decimal places.) Given the following NPV profile for discount rates of 0%, 20%, 50%, and 100%, does there appear to be a problem of multiple IRRs in this range of discount rates? Q Net Present Value Profile $280,000 novation and expansion of the facility. Finally, in year 10 Garmen estimates some recovery of its inve 4 percent in evaluating its investments. en's management has decided to evaluate the project's anticipated payback period. What is the projec -back period because it seems to ignore the fact that the project will provide cash flows over many yea JE i Data Table . er -C Year Year 0 1 2 3 4 5 09 Cash Flow $(251,000) 60,240 60,240 60.240 60,240 (42,000) Cash Flow $64.240 64.240 64,240 64.240 93,000 6 7 8 9 10 Print Done c. The project's NPV is $ (Round to the nearest dollar.) A positive NPV implies: (Select the best choice below.) O A. nothing about the value of the company. OB. value is added to the company if the project is undertaken. O C. value is subtracted from the company if the project is undertaken. al ru (Comprehensive problem) Garmen Technologies Inc operates a small chain of specialty retail stores throughout the southwest and over the Internet, with sales split roughly equally between the two channels of distribution. The company's products range fra monitoring stations. The company recently began investigating the possible acquisition of a regional warehousing facility that cou customers. The warehouse facility would require an expenditure of $251,000 for a rented space in Oklahoma City, Oklahoma, ar follows: The negative cash flow in year 5 reflects the cost of a planned renovation and expansion of the facility. Finally, in year 10 Garme cash flow Garmen uses a discount rate of 12.4 percent in evaluating its investments etail stores throughout the southwestern part of the U.S. The company markets technology-based consumer products both in their stores on. The company's products range from radar detection devices and GPS mapping systems used in automobiles to home-based weather regional warehousing facility that could be used both to stock its retail shops and to make direct shipments to the firm's on-line pace in Oklahoma City, Oklahoma, and would provide a source of cash flow spanning the next 10 years. The estimated cash flows are as MIRR) Star Industries owns and operates and for several municipalities throughout the Midwestern part of the US Startypically contracts with the municipality to provide an os for a period of 20 years The form the constructs and land required by federal low that has capacity for five years. The $10 million expenditure required to construct the new and results in negative cash flows at the end of years 5, 10, and 15 This change in the shram el cash flows over the 20 year contract period introduces the potential for multiple IRRs. Star's management has decided to use the MIRR to evaluate new and investment contract The anal cash flow to Star begin in year 1 and extend through year 20 are estimated to equal 53 million (this does not reflect the cost of constructing as every five years) Stara 10% discount to what is new projects, soit plans to iscount all the construction cost every five years back to year using this rate before calculating the MRR a. The project's NPV where the discount rate is 10% is 5 milion (Round to two decimal places) The project's IRR IS % (Round to two decimal places) The MIRR of the project with a discount rate of 10% % (Round to two decimal places) b. Is this a good investment opportunity for Star Industries? Why or why not? (Select the best choice below) OA. Yes, the project is worthwhile based on all of the measures because the IRR and the MIRR are more than the discount rate and the NPV is positive OB. The project is only worthwhile based on the IRR measure because the IRR is greater than the discount rate, but the MIRR is less than the discount rate and the NPV is negative O C. No, the project is not worthwhile based on any of the measures because the IRR and the MIRR are less than the discount rate and the NPV is negative OD. The project is only worthwhile based on the NPV measure because the IRR and the MIRR are less than the discount rate but the NPV is positive, (M) Saarinen and sports and for several municipales roughout the Most part of the US Statypically contact with the municipality to provide and services for a period of 20 years. The fomhe contracts lined and required by allow) that has a lot five years. The 10 milion pendered to contenuti in negative cash flows the end of yes 10 and 15 This changing hewal cash flower the 20-year contra perted into the potential for me, Star's management as decided to the MRR To Welcons The anal cash inflows to Starbegningewanded trough a 20 are estimated to in on this does not reflect the cost of coming the land very five years) Star 10% discount to evaluate the new projects, so plans to desconhecco cosa every we years back to y single before taking the MRR What are the prend? www opportun? Why why not? . The price where doors and reducine pece The RIN and two decimal place) The Motte project with a discount rate of 10 Round to be decina pa bit good west oportunity for States? Why why not? Select best choice below) OA Yes the based on the because there and the more than the court rule and a posle OB. The project only worth besed on Rebeca Igreater than the discontate but the Miss than the discount date and the give OC No the project and wore based on any because the IR and the MRR scontate and the NPVM OD. The project based on the measure because and the IRR than the discourse but the NPV is positive This Question in of complete Thin Test: 20 pts po Compensive problem Carmen Technologies in partes a chance to the part of the US. The company markets technology and comes both in the and over the one with a spy tween the two channel of the company product range from a detection does and mapping with wormed monitoring station. The company recently began investigating the possibile acquisition of regional warehousing fact that could be used the stock rol shops and to make the firm's on amers The whose facility wodrandture of 251.000 for rented space in Oklahoma City Oloma, and would provide a ce of cash flow spanning the next 10 years. The estimated cash flows areas lewe The negative cash flow intelects the cost of a planned renovation and spansion of the facility Fly in year 10 mesto recovery of its investment at the dose of the consegna higher than cash flow Games discount rate of 124 percent in evaluating investment As a preminary step in analyzing the new investment Games management has decided to evaluate the projects anfipted payback period What the project's spected pack periode Game CEO questioned the most performing the analysis about the meaning of the payback period because som to ignore the fact that the project will provide cash flows over many years beyond the end of the payback period Specifically he wanted to know what settinformation the payback provides you were the analyst how would you respond to Mr Gaman? In the past Gammen's management relied almost exclusively on the IRR to make some choice However, in the stance the lead financial analyst on the project suggested that there may be a problem with the RR because the son on the cash flow changes three times were fe Calculate for the rolet Evaluate the NPV role of the red for discount resource 20 con 100 cent Does 2. Given the cash flow Information in the table the payback period of the projects Round in As a preliminary step in analyzing the new investment Garmer's management has decided to evaluate the projects and payback period. What is the projects expected payback period? Im Game CEO, questioned the analyst performing analysis about the meaning of the payback period because omstolore the fact that the project will provide cash flows over many years beyond the end of the payback period Spedicale Weed to know what is formation the payback provides you were the show would you spend to w Game? men management home on the Romans who wants the financial analyst on the projected that there may be rem with the FR because then the cath.flow change the time we Calefor the pred Nie of the project for conspector percent of 100 percent Does there appew to be a problem of Rs in this range of disco? c. Call the project NPV What does the NPV boicate about the potent created by the project to Me Game who NPV mean recognizing that he was trained as an engineer and has no formal business education a. Given the cash flow information in the table, the payback period of the project is years The payback method tells you: (Select the best choice below.) O A. what the rate of return is for the investment. B. how long it takes you to recover your outflows of cash. C. how much value you are adding or taking from the firm. customers. The warenouse tacity would require an experimure of >251 UU or a rented space in Ukianoma Chy. Ukianoma, and would follows !!! The negative cash flow in year 5 reflects the cost of a planned renovation and expansion of the facility Finally, in year 10 Garmen estima higher than usual cash flow Garmen uses a discount rate of 124 percent in evaluating its investments a. As a preliminary step in analyzing the new investment. Garmen's management has decided to evaluate the project's anticipated paybu the analyst performing the analysis about the meaning of the payback period because it seems to ignore the fact that the project will prov wanted to know what useful information the payback provides. If you were the analyst, how would you respond to Mr. Garmen? b. In the past, Garmen's management has relied almost exclusively on the IRR to make its investment choices. However, in this instanc IRR because the sign on the cash flows changes three times over its life. Calculate the IRR for the project. Evaluate the NPV profile of there appear to be a problem of multiple IRRs in this range of discount rates? c. Calculate the project's NPV. What does the NPV indicate about the potential value created by the project? Describe to Mr. Garmen business education years. (Round to two decimal places.) a. Given the cash flow information in the table, the payback period of the project is The payback method tells you: (Select the best choice below.) O A. what the rate of return is for the investment OB. how long it takes you to recover your outflows of cash. OC. how much value you are adding or taking from the firm, Click to select your answer(s) b. The projects IRR is % (Round to two decimal places.) Given the following NPV profile for discount rates of 0%, 20%, 50%, and 100%, does there appear to be a problem of multiple IRRs in this range of discount rates? Q Net Present Value Profile $280,000 novation and expansion of the facility. Finally, in year 10 Garmen estimates some recovery of its inve 4 percent in evaluating its investments. en's management has decided to evaluate the project's anticipated payback period. What is the projec -back period because it seems to ignore the fact that the project will provide cash flows over many yea JE i Data Table . er -C Year Year 0 1 2 3 4 5 09 Cash Flow $(251,000) 60,240 60,240 60.240 60,240 (42,000) Cash Flow $64.240 64.240 64,240 64.240 93,000 6 7 8 9 10 Print Done c. The project's NPV is $ (Round to the nearest dollar.) A positive NPV implies: (Select the best choice below.) O A. nothing about the value of the company. OB. value is added to the company if the project is undertaken. O C. value is subtracted from the company if the project is undertaken. al ru (Comprehensive problem) Garmen Technologies Inc operates a small chain of specialty retail stores throughout the southwest and over the Internet, with sales split roughly equally between the two channels of distribution. The company's products range fra monitoring stations. The company recently began investigating the possible acquisition of a regional warehousing facility that cou customers. The warehouse facility would require an expenditure of $251,000 for a rented space in Oklahoma City, Oklahoma, ar follows: The negative cash flow in year 5 reflects the cost of a planned renovation and expansion of the facility. Finally, in year 10 Garme cash flow Garmen uses a discount rate of 12.4 percent in evaluating its investments etail stores throughout the southwestern part of the U.S. The company markets technology-based consumer products both in their stores on. The company's products range from radar detection devices and GPS mapping systems used in automobiles to home-based weather regional warehousing facility that could be used both to stock its retail shops and to make direct shipments to the firm's on-line pace in Oklahoma City, Oklahoma, and would provide a source of cash flow spanning the next 10 years. The estimated cash flows are as MIRR) Star Industries owns and operates and for several municipalities throughout the Midwestern part of the US Startypically contracts with the municipality to provide an os for a period of 20 years The form the constructs and land required by federal low that has capacity for five years. The $10 million expenditure required to construct the new and results in negative cash flows at the end of years 5, 10, and 15 This change in the shram el cash flows over the 20 year contract period introduces the potential for multiple IRRs. Star's management has decided to use the MIRR to evaluate new and investment contract The anal cash flow to Star begin in year 1 and extend through year 20 are estimated to equal 53 million (this does not reflect the cost of constructing as every five years) Stara 10% discount to what is new projects, soit plans to iscount all the construction cost every five years back to year using this rate before calculating the MRR a. The project's NPV where the discount rate is 10% is 5 milion (Round to two decimal places) The project's IRR IS % (Round to two decimal places) The MIRR of the project with a discount rate of 10% % (Round to two decimal places) b. Is this a good investment opportunity for Star Industries? Why or why not? (Select the best choice below) OA. Yes, the project is worthwhile based on all of the measures because the IRR and the MIRR are more than the discount rate and the NPV is positive OB. The project is only worthwhile based on the IRR measure because the IRR is greater than the discount rate, but the MIRR is less than the discount rate and the NPV is negative O C. No, the project is not worthwhile based on any of the measures because the IRR and the MIRR are less than the discount rate and the NPV is negative OD. The project is only worthwhile based on the NPV measure because the IRR and the MIRR are less than the discount rate but the NPV is positive