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Capital Budgeting Social Circle Publications Inc. is considering two new magazine products. The estimated net cash...
Capital Budgeting
Social Circle Publications Inc. is considering two new magazine products. The estimated net cash flows from each product are as follow:
|
Year |
Sound Cellar |
Pro Gamer |
|
1 |
65,000 |
70,000 |
|
2 |
60,000 |
55,000 |
|
3 |
25,000 |
35,000 |
|
4 |
25,000 |
30,000 |
|
5 |
45,000 |
30,000 |
|
Total |
220,000 |
220,000 |
Each product requires an investment of $125,000. A rate of 10% has been selected for the net present value analysis.
- Calculate the payback period for the two products.
- Calculate the net present value for the two products.
Solutions
jeff jeffy answered 4 months agoRelated Solutions
Social Circle Publications Inc. is considering two new magazine products. The estimated net cash flows from...
Social Circle Publications Inc. is considering two new magazine
products. The estimated net cash flows from each product are as
follow:
Year
Sound Cellar
Pro Gamer
1
65,000
70,000
2
60,000
55,000
3
25,000
35,000
4
25,000
30,000
5
45,000
30,000
Total
220,000
220,000
Each product requires an investment of $125,000. A rate of 10%
has been selected for the net present value analysis.
Calculate the payback period for the two products.
Calculate the net present value for the two...
1. Social Circle Publications Inc. is considering two new magazine products. The estimated net cash flows...
1. Social Circle Publications Inc. is considering two new
magazine products. The estimated net cash flows from each product
are as follows:
Year
Sound Cellar
Pro Gamer
1
$ 65,000
$ 70,000
2
60,000
55,000
3
25,000
35,000
4
25,000
30,000
5
45,000
30,000
Total
$220,000
$220,000
Each product requires an investment of $125,000. A rate of 10%
has been selected for the net present value analysis.
Present Value of $1 at Compound
Interest
Year
6%
10%
12%
15%
20%...
Cash Payback Period, Net Present Value Method, and Analysis McMorris Publications Inc. is considering two new...
Cash Payback Period, Net Present Value Method, and Analysis
McMorris Publications Inc. is considering two new magazine
products. The estimated net cash flows from each product are as
follows:
Year
Canadian Cycling
European Hiking
1
$155,000
$129,000
2
126,000
152,000
3
109,000
104,000
4
99,000
73,000
5
31,000
62,000
Total
$520,000
$520,000
Present Value of $1 at Compound
Interest
Year
6%
10%
12%
15%
20%
1
0.943
0.909
0.893
0.870
0.833
2
0.890
0.826
0.797
0.756
0.694
3
0.840
0.751...
Cash Payback Period, Net Present Value Method, and Analysis McMorris Publications Inc. is considering two new...
Cash Payback Period, Net Present Value Method, and Analysis
McMorris Publications Inc. is considering two new magazine
products. The estimated net cash flows from each product are as
follows:
Year
Canadian Cycling
European Hiking
1
$120,000
$101,000
2
99,000
118,000
3
85,000
81,000
4
77,000
57,000
5
24,000
48,000
Total
$405,000
$405,000
Present Value of $1 at Compound
Interest
Year
6%
10%
12%
15%
20%
1
0.943
0.909
0.893
0.870
0.833
2
0.890
0.826
0.797
0.756
0.694
3
0.840
0.751...
The management of Quest Media Inc. is considering two capital investment projects. The estimated net cash...
The management of Quest Media Inc. is considering two capital
investment projects. The estimated net cash flows from each project
are as follows:
Year
Radio Station
TV Station
1
$170,000
$310,000
2
170,000
310,000
3
170,000
310,000
4
170,000
310,000
Present Value of an Annuity of $1 at
Compound Interest
Year
6%
10%
12%
15%
20%
1
0.943
0.909
0.893
0.870
0.833
2
1.833
1.736
1.690
1.626
1.528
3
2.673
2.487
2.402
2.283
2.106
4
3.465
3.170
3.037
2.855
2.589...
The management of Quest Media Inc. is considering two capital investment projects. The estimated net cash...
The management of Quest Media Inc. is considering two capital
investment projects. The estimated net cash flows from each project
are as follows:
Year
Radio Station
TV Station
1
$220,000
$460,000
2
220,000
460,000
3
220,000
460,000
4
220,000
460,000
Present Value of an Annuity of $1 at
Compound Interest
Year
6%
10%
12%
15%
20%
1
0.943
0.909
0.893
0.870
0.833
2
1.833
1.736
1.690
1.626
1.528
3
2.673
2.487
2.402
2.283
2.106
4
3.465
3.170
3.037
2.855
2.589...
The management of Quest Media Inc. is considering two capital investment projects. The estimated net cash...
The management of Quest Media Inc. is considering two capital
investment projects. The estimated net cash flows from each project
are as follows:
Year
Radio Station
TV Station
1
$340,000
$610,000
2
340,000
610,000
3
340,000
610,000
4
340,000
610,000
Present Value of an Annuity of $1 at
Compound Interest
Year
6%
10%
12%
15%
20%
1
0.943
0.909
0.893
0.870
0.833
2
1.833
1.736
1.690
1.626
1.528
3
2.673
2.487
2.402
2.283
2.106
4
3.465
3.170
3.037
2.855
2.589...
The management of Quest Media Inc. is considering two capital investment projects. The estimated net cash...
The management of Quest Media Inc. is considering two capital
investment projects. The estimated net cash flows from each project
are as follows:
Year
Radio Station
TV Station
1
$290,000
$610,000
2
290,000
610,000
3
290,000
610,000
4
290,000
610,000
Present Value of an Annuity of $1 at
Compound Interest
Year
6%
10%
12%
15%
20%
1
0.943
0.909
0.893
0.870
0.833
2
1.833
1.736
1.690
1.626
1.528
3
2.673
2.487
2.402
2.283
2.106
4
3.465
3.170
3.037
2.855
2.589...
Capital Investment Appraisal Techniques X construction is considering two projects to develop. The estimated net cash...
Capital Investment Appraisal Techniques X construction is
considering two projects to develop. The estimated net cash flow
from each project is as follows: Project X Project Y Year 1 110,000
75,000 Year 2 65,000 150,000 Year 3 100,000 60,000 Year 4 115,000
55,000 Year 5 35,000 60,000 Project requires an investment of
$200,000. A rate of 15% has been selected for the NPV analysis.
Requires to
a) Calculate Payback period, ARR, Net Present Value and
Profitability Index
b) Which Project...
Capital Budgeting BioMed Engineering is considering two mutually exclusive investments. The projects' expected net cash flows...
Capital Budgeting
BioMed Engineering is considering two mutually exclusive
investments. The projects' expected net cash flows are as
follows:
Expected
Net Cash
Flows
Time Project
A Project
B
0 ($405) ($705)
1 ($285) $200
2 ($205) $205
3 ($105) $210
4 $605 $215
5 $650 $220
6 $925 $225
7 ($200) $230
In your report, identify which project would be selected
(assuming they are mutually exclusive) for each investment
criterion. Note that cash outflows (costs) are given in
parenthesis. Employ the Excel file to answer the following
questions.
Part 1: Net Present Value
C. Construct NPV profiles...
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