QUESTION 1 You need to make a decision on whether to invest RM146300 in Project Y or Project Z that guarantees the following cash flow and annual relevant cost at the end of each year as indicated in the table below. PROJECT Y Year | Cash Flow | Cost | 1 | 40% of your investment | 2% of your investment | 2 | 42% of your investment | 2.3% of your investment | 3 | 38% of your investment | 3% of your investment | 4 | 33% of your investment | 3% of your
Words: 691 - Pages: 3
SRJIS/BIMONTHLY/ALBANUS MUNYAO (718-729) THE RELATIONSHIP BETWEEN CAPITAL BUDGETING TECHNIQUES AND FINANCIAL PERFORMANCE OF COMPANIES LISTED AT THE NAIROBI STOCK EXCHANGE, KENYA Albanus Munyao, South Eastern Kenya University P. O. Box 170-90200, Kitui-Kenya Fredrick Mukoma Kalui, Egerton University, P. O. Box 536, Njoro-Kenya Jacqueline Ngeta, South Eastern Kenya University P. O. Box 170-90200, Kitui-Kenya Abstract The general objective of the study was to find out the relationship between
Words: 3851 - Pages: 16
Payback period * Payback reciprocal * Payback bail-out period * Accounting rate of return Discounted cash flow methods * Net present value * Present value index (profitability index) * Annualized net present value or Equivalent annual annuity * Present value/discounted payback * Internal rate of return * Modified internal rate of return Methods that consider risk * Breakeven Cash Inflow
Words: 1416 - Pages: 6
Course: Finance for Managers Course code: CONTENTS 1. Report to Directors of Bramble Waste Management a. Introduction b. Net Present Value c. Internal Rate of Return d. Tender Price for weekly Collection e. Tender Price for fortnightly Collection f. Other Financial Considerations 2. Report to Directors of Newtownabbot Borough Council a. Introduction b. Evaluation of the financial strengths and weaknesses of the three businesses short listed
Words: 5046 - Pages: 21
depreciation will be used, and no residual value is expected. The committee has selected a rate of 15% for purposes of the net present value analysis Required 1. Calculate the following: a) The average rate of return for each project b) The net present value for each project. Use the present value of $1 table available on the internet http://highered.mcgraw-hill.com/sites/0072994029/student_view0/present_and_future_value_tables.html 2. Why is the present value of Project B greater than Project A
Words: 480 - Pages: 2
5, 2006 TABLE OF CONTENTS List of Figures 3 List of Tables 4 Executive Summary 5 Introduction 6 Statement of Opportunities and Problems 7 Methodology and Analysis 8 Summary and Conclusions 24 Recommendations 25 Works Cited 27 Appendix 28 LIST OF FIGURES Figure 1: NPC’s yield curve 10 Figure 2: Project evaluation 10 LIST OF TABLES Table 1: Bond yield and cost of debt 9 Table 2: Sinking fund cash flow 11 Table 3: Own-bond-yiel-plus-risk-premium
Words: 9287 - Pages: 38
or accounting profit, and net cash flow. Why do these numbers generally differ? 6. Indicate on the following pages the effects of the transactions listed in the following table on total current assets, current ratio, and net income. Chapter 4 7. What is an opportunity cost rate? How is this rate used in time value analysis, and where is it shown on a cash flow time line? Is the opportunity rate a single number that is used in all situations? 8. If a firm’s earnings per share grew from
Words: 450 - Pages: 2
analysis of income statements of Excel and the combination of MACH3 and Excel, we found out that the Gillette Company should go forward with the development of the MACH3 shaving system because we found the net present value of the combination of MACH3 and Excel is higher than the net present value of Excel system. Through the information, we found out that the sales of MACH3 during 2009~2014. “Gillette’s sales of the Excel line are expected to reach $1 billion per year by 2007 and to stabilize at that
Words: 653 - Pages: 3
rate because this project is considered a fad project it will only last five years then it will be terminated. This paper will focus on free cash flows, projection of cash flows during years 1-5, projects initial outlay, cash flow diagram, net present value, internal rate of return, and if the project should be accepted. Free Cash Flow Versus Profits Earned After reviewing the numbers for project Caledonia Products, it shows that the best route that Caledonia Products Company should focus
Words: 1541 - Pages: 7
realized is INR 650,000, what will be the maximum investment the firm can make. Q3. DEF Ltd. is presently an unlevered firm whose cost of equity is 12%. It is contemplating to recapitalize itself so that the resulting debt-equity ratio in market value terms would become 30:70 at the end of third year from now and remain as it is forever. It is estimated that the firm will be taking debt for the three years, whose interest is payable at the end of the year at a rate of 8% p.a., as follows: Time
Words: 652 - Pages: 3
