Q) A firm has a WACC of 14.49% and is deciding between two mutually exclusive projects. Project A has an initial investment of $60.09. The additional cash flows for project A are: year 1 = $19.19, year 2 = $38.50, year 3 = $47.11. Project B has an initial investment of $70.51. The cash flows for project B are: year 1 = $54.40, year 2 = $48.97, year 3 = $20.74. Calculate the Following:

1)payback period for Project A

2)Payback period for Project B

3)NPV for project A

4) NPV for project B

Suppose a company has two mutually exclusive projects, both of which are three years in length. Project A has an initial outlay of $7,000 and has expected cash flows of $3,000 in year 1, $4,000 in year 2, and $4,000 in year 3. Project B has an initial outlay of $10,000 and has expected cash flows of $2,000 in year 1, $4,000 in year 2, and $5,000 in year 3. The required rate of return is 12% for projects at this company. What is the net present value for the best project? (Answer to the nearest dollar.)

1. I have $400,000 in the bank now. I plan to withdraw $20,000 at the end of this year. Each subsequent end of year withdrawal will increase by 8%. If I earn 10% per year on my investments in the first 3 years, then 5% per year in the next 2 years, and 4% per year in the following 3 years,
   1. Determine how much money I will have at the end of 8 years.
   2. Determine the initial withdrawal amount at the end of this year that will leave me with no money at the end of 8 years using either Solver or Goal Seek.

Suppose a company has two mutually exclusive projects, both of which are three years in length. Project A has an initial outlay of $8,000 and has expected cash flows of $3,000 in year 1, $4,000 in year 2, and $6,000 in year 3. Project B has an initial outlay of $7,000 and has expected cash flows of $4,000 in year 1, $5,000 in year 2, and $6,000 in year 3. The required rate of return is 13% for projects at this company. What is the net present value for the best project? (Answer to the nearest dollar.)

You have $5,000 to invest for the next year and are considering three alternatives: A money market fund with an average maturity of 30 days offering a current yield of 2.0% per year A 1-year savings deposit at a bank offering an interest rate of 4.0% A 20-year U.S. Treasury bond offering a yield to maturity of 4.0% per year A 20-year corporate bond offering a yield to maturity of 7. What is the risk profile of each of these assets? What role does your forecast of future interest rates play in your decisions?

1. ) A company wants to purchase a new machine. There two options Machine A and Machine B. The first costs of A and B are $9000 and $11,000 respectively. Machine A has net annual benefits of $1800 for the first year and will increase by $150 every year during its five year useful life, and the salvage value is $600. Machine B has net annual benefits of $3200 but will decrease by $150 every year during during each year of its four year useful life, and the salvage value is $1500. If the MARR is 12%, which machine should be selected?

Q) A firm has a WACC of 10.27% and is deciding between two mutually exclusive projects. Project A has an initial investment of $61.22. The additional cash flows for project A are: year 1 = $17.13, year 2 = $36.95, year 3 = $44.72. Project B has an initial investment of $72.28. The cash flows for project B are: year 1 = $52.10, year 2 = $45.47, year 3 = $39.43. Calculate the Following:

a. Payback Period for Project A:

b. Payback Period for Project B:

c. NPV for Project A:

d. NPV for Project B:

Assume you have developed a business over the past 20 years. You want to determine its worth if you sell it. The value of the property is $2 million and is paid off (no debt). Over the next 10 years, you expect to sell $200,000 worth of widgets per year, increasing at $20,000 worth of widgets each year.   Your costs are $120,000 per year, increasing at $10,000 per year. However, at year 5 you must spend $2,000,000 to upgrade equipment to keep up with production. Your costs thereafter are $150,000 per year. What is the present value of the business (i.e. total cost if sole today) assuming an interest rate of 4%/year).