(p60) (p8) Question 16 Answer = 3 Net profit is the difference between the total costs and the total income over the life of the project. ((-155 000) + (-5 000) + 40 000 + 50 000 + 50 000 + 50 000 + 30 000) = R60 000 Question 17 Answer = 4 Net profit is the difference between the total costs and the total income over the life of the project. ((-140 000) + 15 000 + 5 000 + 20 000 + 30 000 + 60 000 + 70 000) = R60 000 Additional information about net profit: advantage as method for comparing
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Chapter 6 | Capacity Planning | | TRUE/FALSE 1. Capacity is the maximum rate of output of a process. Answer: True Reference: Introduction Difficulty: Easy Keywords: capacity‚ maximum output rate 2. Capacity decisions should be made separate from strategic decisions. Answer: False Reference: Introduction Difficulty: Moderate Keywords: capacity decision‚ strategic decisions 3. Capacity can be expressed by output or input measures
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------------------------------------------------- FINC5001 Capital Market and Corporate Finance ------------------------------------------------- Workshop 5 – Capital Budgeting II 1. Basic Concepts Review a) In applying Net Present Value‚ what factors do we include‚ and what factors do we ignore? Use cash flows not accounting income Ignore * sunk costs * financing costs Include * opportunity costs * side effects * working capital * taxation * inflation
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(60‚000) 1 18‚000 19‚000 2 15‚000 17‚000 3 18‚000 19‚000 4 16‚000 14‚000 5 19‚000 15‚000 6 14‚000 13‚000 Evaluate the above proposals according to: 1. Pay Back Period. 2. Accounting Rate of Return (ARR) 3. Net present value method (NPV) Proposal A is better than B‚ because ARR and NPV are higher than Proposal B 2. There are two Proposals. Proposal A and Proposal B. Proposal A costs $ 80‚000 and Proposal B costs $ 100‚000
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Papa Geo’s – Restaurant Budget Proposal For 2012 - 2017 BUSN-278 [Term] Professor[name] DeVry University ------------------------------------------------- Table of Contents Section | Title | Subsection | Title | Page Number | 1.0 | Executive summary | | | | 2.0 | Sales Forecast | | | | | | 2.1 | Sales Forecast | | | | 2.2 | Methods and Assumptions | | 3.0 | Capital Expenditure Budget | | | | 4.0 | Investment Analysis | | | | | | 4.1 | Cash flows
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_______________ 1. What is the net present value of a project with the following cash flows if the discount rate is 14 percent? [pic] A. -$3‚140.43 B. -$929.90 C. $247.181 D. $1‚027.67 E. $1‚127.08 2. Timothy is considering an investment of $10‚000. This investment is supposedly going to provide him with cash inflows of $2‚500 in the first year and $6‚000 a year for the following 2 years. At a discount rate of zero percent this investment has a net present value (NPV) of _____
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Carriers Exhibits.xls. This case provides the opportunity to make a capital budgeting decision by using discounted cash flow analysis to make an investment and corporate policy decision. Ocean Carriers is a shipping company evaluating a proposed lease of a ship for a three-year period beginning in 2003. The proposed leasing contract offers very attractive terms‚ but no ship in Ocean Carrier’s current fleet meets the customer’s requirements. The firm must decide if future expected cash flows warrant
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Corporate Financial Management Practice Mid-Semester Examination (Answers at back) Disclaimer: This practice exam covers a selection of the types of questions that may be asked in the mid-semester exam‚ however it should not be taken as being exhaustive as to the topics that could be included in the exam. Students should therefore not be surprised if other types of questions appear in the exam. 1. $200 invested today and earning 8 per cent per annum compounded semi-annually will grow
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the company is willing to accept before starting a project. It is used in project evaluation to evaluate the amount of return on the project. A common method for evaluating the hurdle rate is apply the discounted cash flow method to the project‚ like net present value. 2. How does Teletech Corporation currently use the hurdle rate? They used it based on the firm’s rating‚ beta‚ cost of capital‚ and they calculated WACC of 9.3% for the whole corporation. 3. What are Rick Phillips’s arguments
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Lovely Professional University‚ Punjab Course Code Course Title Course Planner Lectures FIN302 BASIC FINANCIAL MANAGEMENT 16414::Jyoti Verma Course Category Tutorials Practicals Credits Courses with numerical and conceptual focus 4.0 1.0 0.0 TextBooks Sr No Title Author Edition Year Publisher Name T-1 Essentials of Financial Management I M Pandey 3rd 2012 Vikas Publication Reference Books Sr No Title Author Edition
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