this online NPV Calculation Tool http://finance.thinkanddone.com/online-n… we get the following NPV at 15% Net Cash Flows CF0 = -3000000 CF1 = 1100000 CF2 = 1450000 CF3 = 1300000 CF4 = 950000 Discounted Net Cash Flows DCF1 = 1100000/(1+0.15)^1 = 1100000/1.15 = 956521.74 DCF2 = 1450000/(1+0.15)^2 = 1450000/1.3225 = 1096408.32 DCF3 = 1300000/(1+0.15)^3 = 1300000/1.52087 = 854771.1 DCF4 = 950000/(1+0.15)^4 = 950000/1.74901 = 543165.58 NPV Calculation NPV = 956521.74 +
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Class Discussion 1. Dartmouth Inc’s latest net income was $1‚250‚000‚ and it had 225‚000 shares outstanding. The company wants to pay out 45% of its income. What dividend per share should it declare? 2. Garcia Industries has sales of $200‚000 and accounts receivable of $18‚500‚ and it gives its customers 25 days to pay. The industry average DSO is 27 days‚ based on a 365-day year. If the company changes its credit and collection policy sufficiently to cause its DSO to fall to the
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This way in 1955 the first local of the Corporation was inaugurated in charge of Ray Kroc. During the 50´s and the 60´s‚ Ray’s managerial team Kroc established the successful philosophy of the system of the company: Quality‚ Service‚ Cleaning and Value. At the moment this Franchise possesses more than 25.000 establishments in 117 countries and five are the continents in which the Golden Arches run off with‚ number that was increased more with the recent opening of 3.000 local during 1999. Although
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Running head: A COMPARISON OF EVA AND NPV A Comparison of EVA and NPV (discuss the differences and similarity of EVA and NPV; why would companies choose to adopt EVA‚ implementation issues; chronicle the implementation experience of EVA on a real life company). 1 A COMPARISON OF EVA AND NPV 2 A Comparison of EVA and NPV (discuss the differences and similarity of EVA and NPV; why would companies choose to adopt EVA‚ implementation issues; chronicle the implementation
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Return Calculation Machine A $ Machine B $ Net Return 155‚000 205‚000 Total Return-Investment 155‚000 – 65‚000 = 90‚000 205‚000 – 85‚000 = 120‚000 Average Return 90‚000 / 5 years = 18‚000 120‚000 / 5 years = 24‚000 ARR = (Average / Investment) (18‚000 / 65‚000) x 100 = 28% (24‚000 / 85‚000) x 100 = 28% Net Present Value Calculation Year Discount Factor Machine A $ Machine B $ Cash Flow Present Value Cash Flow Present Value 0 1 (65‚000) (65‚000) (85‚000) (85‚000)
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The crossover rate‚ where the NPVs are the same is 8.16%. Project A Project B Required Return 8.25% Required Return 8.25% Cash Flows Period Cash Flows Cash Flows Period Cash Flows Initial Outlay -8‚500 0 -8‚500 Initial Outlay -9‚500 0 -9‚500 1 3‚600 1 3‚900 2 2‚400 2 2‚900 3 2‚850 3 2‚900 4 5‚200 4 5‚550 Discounted Payback Period 3.23 Discounted Payback Period 3.28 NPV $2‚907.51 NPV $2‚905.64 Profitability Index
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NPV Versus IRR W.L. Silber I. Our favorite project A has the following cash flows: -1000 0 0 1 0 2 +300 3 +600 4 +900 5 We know that if the cost of capital is 18 percent we reject the project because the net present value is negative: - 1000 + 300 600 900 + + = NPV 3 4 (1.18) (1.18) (1.18)5 - 1000 + 182.59 + 309.47 + 393.40 = -114.54 We also know that at a cost of capital of 8% we accept the project because the net present value is positive: - 1000 + 300 600 900
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and research development projects are worth pursuing. It is budget for major capital‚ or investment‚ expenditures. Many formal methods are used in capital budgeting‚ including the techniques such as 1. Accounting rate of return 2. Net present value 3. Profitability index 4. Internal rate of return 5. Modified internal rate of return 6. Equivalent annuity These methods use the incremental cash flows from each potential investment‚ or project. Techniques based on accounting
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i. Executive Summary KIA‚ the famous automobile manufacturer in Korean‚ established distribution in Nanaimo since 2000. Through the interview with the manager and investigation‚ this project analyses the statement about KIA dealership in Nanaimo‚ including the general environment‚ industry environment‚ competitive and strategy analysis. Based on the combination of industry environment and general environment‚ it chooses cost strategy as the suitable strategy for KIA Motors. It uses SWOT analytical
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Chief Complaint: “The voices told me to do it.” History of Present Illness (tell us also whether this is inpatient or outpatient setting): MJ a 23-year-old African American male brought to the Emergency Department by family member after he was found sitting in the middle of the street. The patient states‚ “The voices told me to do it.” The patient states that‚ for the past 7-8 months that people are not who they say they are so; he began to isolate himself in his room‚ dropped out of school‚ and
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