Khasan | UBU Number: | 11033772 | Lecturer: | Cyril Antony | Module Name: | Decision Support Systems | Batch # | 410 | | | \ Report 1. What is the Net Present Value of the garage’s cash flow with and without the platform? Net present Value of the Garage’s cash flow with Platform: NPV = £ 173‚614 Net present Value of the Garage’s cash flow with Platform: NPV = £ 38‚047 i. Should the garage manager buy the platform? Garage manager should buy the platform because‚ the
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Response Feedback: PI = PV of all Future CFs/|initial outlay| Question 4 0 out of 1 points If you receive $1‚939 at the end of each year for the first three years and $2‚224 at the end of each year for the next two years. What is the future value of this cash flow stream? Assume interest rate is 4%. Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example‚ if your answer is $12.345 then enter as 12.35 in the answer box.
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remain competitive‚ this decision is huge. Along with three courses of action‚ the firm needs to consider the implementation of a capitol budget. When seeking capital budgeting decisions‚ the objective is to find investment projects that will add value to the firm. These are projects that are worth more to the firm than they cost or
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Yonsei University Graduate School of Business Corporate Finance Harvard Business Case Investment Analysis and Tri Star Lockheed 1. (A) The payback is 35‚000/5‚000= 7 years Computation of the NPV : 15 NPV= -35‚000 + Σ 5‚000 / ( 1 + 12%)^ 15 i=1 NPV = $- 947. 67 Computation of the IRR : 15 0= -35‚000 + Σ 5‚000 / ( 1 + IRR)^ 15 i=1
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the idea of wealth maximization.This involves increasing the Earning per shareof the shareholders and to maximize the net present worth. Wealth is equal to the the difference between gross presentworth of some decision or course of action and theinvestment required to achieve the expected benefits. Gross present worth involves the capitalised value of the expected benefits.This value is discounted a some rate‚thisrate depends on the certainty or uncertainty factor of the expected benefits. The Wealth
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flow (DCF) methods: the net present value (NPV) method and the internal-rate-of-return (IRR) method 4. Use and evaluate the payback method (PB) 5. Use and evaluate the accounting rate-of-return (ARR) method 6. Income taxes and capital expenditure analysis 7. Post-completion audits Capital Budgeting • Capital budgeting involves investment decisions in projects that spans multiple years. – A good investment decision • One that raises the current market value of the firm’s equity‚ thereby
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ACCT505 Part B Capital Budgeting problem Clark Paints Data: Cost of new equipment $200‚000 Expected life of equipment in years 5 Disposal value in 5 years $40‚000 Life production - number of cans 5‚500‚000 Annual production or purchase needs 1‚100‚000 Initial training costs 0 Number of workers needed 3 Annual hours to be worked per employee 2‚000 Earnings per hour for employees $12
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increases by a specific multiple‚ the total dollar value of the shares remains the same compared to pre-split amounts‚ because the split did not add any real value. A stock split is usually done by companies that have seen their share price increase to levels that are either too high or are beyond the price levels of similar companies in their sector. The primary motive is to make shares seem more affordable to small investors even though the underlying value of the company has not changed. A stock
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1. THE INVESTMENT DETECTIVE This case presents the cash flows of eight unidentified investments‚ all of equal initial investment size. The student’s task is to rank the projects. The first objective of the case is to examine critically the principal capital-budgeting criteria. A second objective is to consider the problem that arises when net present value (NPV) and internal rate of return (IRR) disagree as to the ranking of two mutually exclusive projects. Finally‚ the case is a vehicle for introducing
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CAPITAL BUDGETING ANALYSIS To achieve success over time‚ a firm’s managers must identify and invest in projects that provide positive net present values to maximize shareholder wealth. Capital Budgeting Is the process of identifying‚ evaluating‚ and implementing a firms investment opportunities. Involves long-term projects Requires large initial investment Constructing plant and equipment Time frame maybe as short as a year or as long as twenty to thirty years The profitability of a firm
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