Net present value project management
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Project A . Project B . Project C . 0 Initial Investment -80 -80 -80 1 Incomes from Operation Phase of Projects . 30 40 50 2 40 40 40 3 50 40 30 Ans 1. Introduction: NPV or the Net present value shows the difference between the discounted value or the present value of future cash inflows and the present value of cash outflows for a given period.
[DOC File]Chapter 12
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Compute the net present value of the project. Level: Easy LO: 1 . Ans: 98. Grossett Corporation has provided the following data concerning a proposed investment project: The company uses a discount rate of 10%. The working capital would be released at the end of the project. Required: Compute the net present value of the project.
[DOC File]Chapter 14—Capital Budgeting - CPA Diary
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According to the evaluation, the project would require an initial investment of $17,166 and would provide equal annual cost savings for five years. Based on a 10 percent discount rate, the project generates a net present value of $1,788. The project is not expected to have any salvage value …
[DOC File]Chapter 5 Project Appraisal and Risk
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The following financial information relates to an investment project: $000. Present value of sales revenue. 50,025 Present value of variable costs. 25,475 Present value of contribution. 24,550 Present value of fixed costs. 18,250 Present value of operating income. 6,300 Initial investment. 5,000 Net present value. 1,300
[DOC File]Revision 2 – Investment Appraisal
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(a) Calculate the net present value of Project 1 and comment on whether this project is financially acceptable to Ridag Co. (12 marks) (b) Calculate the equivalent annual costs of Machine 1 and Machine 2, and discuss which machine should be purchased.
[DOC File]Chapter 7: Net Present Value and Capital Budgeting
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d. the net present value of the investment. Capital Budgeting with Inflation. 7.13 Consider the following cash flows on two mutually exclusive projects. Year Project A Project B. 0 -$40,000 -$50,000. 1 20,000 10,000. 2 15,000 20,000. 3 15,000 40,000
[DOC File]Chapter 1: Financial Management in Context
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Present Value = Future Value / ( 1 + i )n. i = discount rate . n = number of years the money is discounted. Net Present Value. Incorporates the effect of time on money. Gives an answer in dollars instead of years. If NPV is positive then the expenditure is generating discounted cash flows in excess of the amount necessary to repay the original ...
[DOC File]Chapter
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The Net Present Value (NPV) of an investment. represents the contribution that the investment makes to the value of the firm. is defined as the present value of future cash inflows. C. violates the basic firm objective of wealth maximization. ignores the initial cost of the investment. Select the following sentence completion that is incorrect.
[DOC File]Management 133 - California State University, Sacramento
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_____ 14. If an investment project has a positive net present value, then the internal. rate of return is: less than the cost of capital. greater than the cost of capital. equal to the cost of capital. indeterminate; it depends on the length of the investment. _____ 15. As the cost of capital increases. fewer projects are accepted. more ...
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