Question
In: Finance
Three investments cost $5,000 each and have the following cash flows. Rank them on the basis...
Three investments cost $5,000 each and have the following cash flows. Rank them on the basis of their payback periods. Round your answers to one decimal place.
| Year | A | B | C | |||
| 1 | $ | 1,800 | $ | 2,800 | $ | 0 |
| 2 | 1,800 | 2,100 | 1,000 | |||
| 3 | 1,800 | 1,400 | 1,700 | |||
| 4 | 1,800 | 1,100 | 3,000 | |||
| 5 | 1,800 | 500 | 5,500 |
Payback for A: years ?
Payback for B: years ?
Payback for C: years ?
Based on the payback periods, -Select-investment (A,B,C)should be chosen.
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Problem 19-05 Three investments cost $5,000 each and have the following cash flows. Rank them on...
Problem 19-05
Three investments cost $5,000 each and have the following cash
flows. Rank them on the basis of their payback periods. Round your
answers to one decimal place.
Year
A
B
C
1
$
1,900
$
2,900
$
0
2
1,900
2,200
900
3
1,900
1,200
1,300
4
1,900
900
4,200
5
1,900
600
7,200
Payback for A: ____ years
Payback for B: ____ years
Payback for C: ____ years
Three investments each cost $3,000 and have the following cash flows. If you had to choose...
Three investments each cost $3,000 and have the following cash
flows. If you had to choose only one project based on payback
period, which would you choose?
Year
Expected Cash Flows
A
B
C
0
-$3,000
-$3,000
-$3,000
1
1,200
1,700
-
2
1,300
1,100
2,000
3
1,400
1,700
1,500
4
1,500
-
1,000
B with a payback of 2.12 years
A with a payback of 2.36 years
C with a payback of 2.67 years
B with a...
You are given three investment alternatives to analyze. The cash flows from these three investments are...
You are given three investment alternatives to analyze. The cash
flows from these three investments are as follows:
Investment
End of Year
A
B
C
1
$
2 comma 0002,000
$
3 comma 0003,000
$
4 comma 0004,000
2
3 comma 0003,000
3 comma 0003,000
4 comma 0004,000
3
4 comma 0004,000
3 comma 0003,000
( 4 comma 000 )(4,000)
4
( 5 comma 000 )(5,000)
3 comma 0003,000
( 4 comma 000 )(4,000)
5
5 comma 0005,000
5 comma...
You are given three investment alternatives to analyze. The cash flows from these three investments are...
You are given three investment alternatives to analyze. The cash
flows from these three investments are as follows:
Investment
End of Year
A
B
C
1
$
2 comma 0002,000
$
3 comma 0003,000
$
4 comma 0004,000
2
3 comma 0003,000
3 comma 0003,000
4 comma 0004,000
3
4 comma 0004,000
3 comma 0003,000
( 4 comma 000 )(4,000)
4
( 5 comma 000 )(5,000)
3 comma 0003,000
( 4 comma 000 )(4,000)
5
5 comma 0005,000
5 comma...
ou are given three investment alternatives to analyze. The cash flows from these three investments are...
ou are given three investment alternatives to analyze. The cash
flows from these three investments are shown in the popup
window:.... Assuming a discount rate of 21 percent, find the
present value of each investment.
a. What is the present value of investment A at 21 percent
annual discount rate? $ nothing (Round to the nearest
cent.)
b. What is the present value of investment B at 21 percent
annual discount rate? $ nothing (Round to the nearest
cent.)
END...
You are given three investment alternatives to analyze. The cash flows from these three investments are...
You are given three investment alternatives to analyze. The cash
flows from these three investments are as follows:
End of Year A B C
1 $3,000 $3,000 $4,000
2 4,000 3,000 4,000
3 5,000 3,000 (4,000)
4 -6,000 3,000 (4,000)
5 6,000 7,000 14,000
What is the present value of each of these three investments if
the appropriate discount rate is 14 percent?
a. What is the present value of investment A at an annual
discount rate of 14 percent?
You are given three investment alternatives to analyze. The cash flows from these three investments are...
You are given three investment alternatives to analyze. The cash
flows from these three investments are as follows:
End of Year A B C
1 $1,000 $3,000 $5,000
2 2,000 3,000 5,000
3 3,000 3,000 (5,000)
4 -4,000 3,000 (5,000)
5 4,000 6,000 15,000
What is the present value of each of these three investments if
the appropriate discount rate is 15 percent?
You are given three investment alternatives to analyze. The cash flows from these three investments are...
You are given three investment alternatives to analyze. The cash
flows from these three investments are as follows:
End of year
a
b
c
1
$1,000
$2,000
$6,000
2
2,000
2,000
6,000
3
3,000
2,000
(6,000)
4
(4,000)
2,000
(6,000)
5
4,000
5,000
16,000
What is the present value of each of these three investments if
the appropriate discount rate is 9 percent?
You are given three investment alternatives to analyze. The cash flows from these three investments are...
You are given three investment alternatives to analyze. The cash
flows from these three investments are as follows:
Investment
End of Year A B C
1 $1,000 $3,000 $5,000
2 2,000 3,000 5,000
3 3,000 3,000 (5,000)
4 -4,000 3,000 (5,000)
5 4,000 7,000 15,000
What is the present value of each of these three investments if
the appropriate discount rate is 13 percent?
You are evaluating a project that is expected to produce cash flows of $5,000 each year...
You are evaluating a project that is expected to produce cash
flows of $5,000 each year for the next 3 years and $7,000 each year
for the following 3 years. The IRR of this 6-year project is 12%.
If the firm’s WACC is 10%, what is the project’s NPV?
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