Question : 141. A project has estimated annual net cash flows of $90,000. : 1246971

 

141. A project has estimated annual net cash flows of $90,000. It is estimated to cost $405,000. Determine the cash payback period. 

4.5 years ($405,000 / $90,000)

142. A project has estimated annual cash flows of $95,000 for four years and is estimated to cost $260,000. Assume a minimum acceptable rate of return of 12%. Using the following tables determine the (a) net present value of the project and (b) the present value index, rounded to two decimal places.Below is a table for the present value of $1 at compound interest. 

Year

6%

10%

12%

1

.943

.909

.893

2

.890

.826

.797

3

.840

.751

.712

4

.792

.683

.636

5

.747

.621

.567

 

 

 

 

Below is a table for the present value of an annuity of $1 at compound interest. 

Year

6%

10%

12%

1

.943

.909

.893

2

1.833

1.736

1.690

3

2.673

2.487

2.402

4

3.465

3.170

3.037

5

4.212

3.791

3.605

 

 

 

 

143. A project has estimated annual cash flows of $90,000 for three years and is estimated to cost $250,000. Assume a minimum acceptable rate of return of 10%. Using the following tables determine the (a) net present value of the project and (b) the present value index, rounded to two decimal places.Below is a table for the present value of $1 at compound interest. 

Year

6%

10%

12%

1

.943

.909

.893

2

.890

.826

.797

3

.840

.751

.712

4

.792

.683

.636

5

.747

.621

.567

 

 

 

 

Below is a table for the present value of an annuity of $1 at compound interest. 

Year

6%

10%

12%

1

.943

.909

.893

2

1.833

1.736

1.690

3

2.673

2.487

2.402

4

3.465

3.170

3.037

5

4.212

3.791

3.605

 

 

 

 

144. A project is estimated to cost $273,840 and provide annual cash flows of $60,000 for seven years. Determine the internal rate of return for this project, using the following table. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12% [($273,840 / $60,000) = 4.564, the present value of an annuity factor for seven periods at 12%.

145. A project is estimated to cost $248,400 and provide annual cash flows of $50,000 for eight years. Determine the internal rate of return for this project, using the following table. 

Year

6%

10%

12%

1

.943

.909

.893

2

1.833

1.736

1.690

3

2.673

2.487

2.402

4

3.465

3.170

3.037

5

4.212

3.791

3.605

6

4.917

4.355

4.111

7

5.582

4.868

4.564

8

6.210

5.335

4.968

9

6.802

5.759

5.328

10

7.360

6.145

5.650