Question

In: Finance

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash...

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash outlay of $80,000 and expected free cash flows of $24,000 at the end of each year for 7 years. The required rate of return for this project is 6 percent.
a. What is the project's payback period?

3.33 years
b. What is the project's NPV?

____
c. What is the project's PI?

_____
d. What is the project's IRR?

_____

Expert Solution

Solution :

a. The Project's Payback period = 3.33 years

b. The Project's NPV= $ 53,977.15

c. The Project's PI = 1.6747

d. The Project's IRR = 22.93 %

Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.

jeff jeffy answered 8 months ago

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash...

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash outlay of $90,000 and expected free cash flows of $28,000 at the end of each year for 5 years. The required rate of return for this project is 6 percent. a. What is the project's payback period? b. What is the project's NPV? c. What is the project's PI? d. What is the project's IRR?

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash...

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash outlay of $80000 and expected free cash flows of $25000 at the end of each year for 6 years. The required rate of return for this project is 9 percent. a. What is the project's payback period? b. What is the project's NPV? c. What is the project's PI? d. What is the project's IRR?

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash...

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash outlay of $70,000 and expected free cash flows of $28,000 at the end of each year for 5 years. The required rate of return for this project is 8 percent. a. What is the project's payback period? b. What is the project's NPV? c. What is the project's PI? d. What is the project's IRR?

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash...

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash outlay of $90,000 and expected free cash flows of $22,000 at the end of each year for 7 years. The required rate of return for this project is 9 percent. a. What is the project's payback period? b. What is the project's NPV? c. What is the project's PI? d. What is the project's IRR?

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash...

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash outlay of $90,000 and expected free cash flows of $26,000 at the end of each year for 6 years. The required rate of return for this project is 6 percent. a. What is the project's payback period? b. What is the project's NPV? c. What is the project's PI? d. What is the project's IRR?

NPV, PI, and IRR calculations) You are considering a project with an initial cash outlay of...

NPV, PI, and IRR calculations) You are considering a project with an initial cash outlay of $70,000 and expected free cash flows of $28,000 at the end of each year for 6 years. The required rate of return for this project is 7 percent. a. What is the project's payback period? b. What is the project's NPV? c. What is the project's PI? d. What is the project's IRR?

. For each project, calculate the NPV, IRR, profitability index (PI) and the payback period. For...

. For each project, calculate the NPV, IRR, profitability index (PI) and the payback period. For each capital budgeting decision tool, indicate if the project should be accepted or rejected, assuming that each project is independent of the others. Important Note: The venture capital folks have a firm maximum payback period of four years. Project A= Required rate of Return= 16.30% Project B= R= 12.50% Project C= R= 15.35% Project D= R= 17.25% Expected cash flows for the four...

(NPV, PI, and IRR calculations) You are considering two independent projects, project A and project B....

(NPV, PI, and IRR calculations) You are considering two independent projects, project A and project B. The initial cash outlay associated with project A is $50,000 and the initial cash outlay associated with project B is $70,000 The required rate of return on both projects is 9 percent. The expected annual free cash inflows from each project are in the popup window: Calculate the NPV, PI, and IRR for each project and indicate if the project should be accepted. ...

(NPV, PI, and IRR calculations) You are considering two independent projects, project A and project B....

(NPV, PI, and IRR calculations) You are considering two independent projects, project A and project B. The initial cash outlay associated with project A is $50,000 and the initial cash outlay associated with project B is $70,000 The required rate of return on both projects is 12 percent. The expected annual free cash inflows from each project are in the popup window: .Calculate the NPV, PI, and IRR for each project and indicate if the project should be accepted. a....

For each project, calculate the NPV, IRR, profitability index (PI) and the payback period. For each...

For each project, calculate the NPV, IRR, profitability index (PI) and the payback period. For each capital budgeting decision tool, indicate if the project should be accepted or rejected, assuming that each project is independent of the others. Important Note: The venture capital folks have a firm maximum payback period of four years. Risk free rate = 1.10%, MRP = 9.5%, Required return = 14.40% Yes excel is fine Expected cash flows for the four potential projects that Avalon is...

Question

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash...

Solutions

Expert Solution

Related Solutions

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash...

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash...

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash...

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash...

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash...

NPV, PI, and IRR calculations) You are considering a project with an initial cash outlay of...

. For each project, calculate the NPV, IRR, profitability index (PI) and the payback period. For...

(NPV, PI, and IRR calculations) You are considering two independent projects, project A and project B....

(NPV, PI, and IRR calculations) You are considering two independent projects, project A and project B....

For each project, calculate the NPV, IRR, profitability index (PI) and the payback period. For each...

Question

​(Payback ​period, NPV,​ PI, and IRR calculations​) You are considering a project with an initial cash...

Solutions

Expert Solution

Related Solutions

(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash...