Question
In: Finance
Consider the following two projects: Project Year 0 C/F Year 1 C/F Year 2 C/F Year...
Consider the following two projects: Project Year 0 C/F Year 1 C/F Year 2 C/F Year 3 C/F Year 4 C/F Year 5 C/F Year 6 C/F Year 7 C/F Discount Rate Alpha minus79 20 25 30 35 40 N/A N/A 16% Beta minus80 25 25 25 25 25 25 25 17% The net present value (NPV) for project beta is closest to:
Solutions
Expert Solution
| i | ii | iii | iv=ii*iii | |
| year | Beta cash flow | PVIF @ 17% | Present value | |
| 0 | -80 | 1.0000 | (80.00) | |
| 1 | 25 | 0.8547 | 21.37 | |
| 2 | 25 | 0.7305 | 18.26 | |
| 3 | 25 | 0.6244 | 15.61 | |
| 4 | 25 | 0.5337 | 13.34 | |
| 5 | 25 | 0.4561 | 11.40 | |
| 6 | 25 | 0.3898 | 9.75 | |
| 7 | 25 | 0.3332 | 8.33 | |
| 18.06 | ||||
| therefore NPV of Beta = | 18.06 | |||
jeff jeffy answered 9 months agoRelated Solutions
Consider the following two projects: Project Year 0 Cashflow Year 1 Cashflow Year 2 Cashflow Year...
Consider the following two projects:
Project Year 0 Cashflow Year 1
Cashflow Year 2 Cashflow Year 3
Cashflow Year 4 Cashflow Discount rate
A -100 40 50 60 N/A .15
B -147 50 70 90 5 .15
An incremental IRR of Project B over Project A is
_________%.
(Please round to two decimal places, write the number only
without "%". i.e. if the answer is "5%", write "5.00")
Consider the following two projects: Project Year 0 Cash Flow Year 1 Cash Flow Year 2...
Consider the following two projects:
Project
Year 0
Cash Flow
Year 1
Cash Flow
Year 2
Cash Flow
Year 3
Cash Flow
Year 4
Cash Flow
Discount Rate
A
-100
40
50
60
N/A
.15
B
-73
30
30
30
30
.15
Assume that projects A and B are mutually exclusive. The correct
investment decision and the best rational for that decision is
to:
Group of answer choices
a.invest in project A since NPVB < NPVA.
b.invest in project B...
Consider the following cash flows on two mutually exclusive projects: Year Project A Project B 0...
Consider the following cash flows on two mutually exclusive
projects:
Year
Project A
Project B
0
–$
68,000
–$
83,000
1
48,000
47,000
2
43,000
56,000
3
38,000
59,000
The cash flows of Project A are expressed in real terms, whereas
those of Project B are expressed in nominal terms. The appropriate
nominal discount rate is 11 percent and the inflation rate is 5
percent. Calculate the NPV for each project. (Do not round
intermediate calculations and round your answers...
Consider the following cash flows on two mutually exclusive projects: Year Project A Project B 0...
Consider the following cash flows on two mutually exclusive
projects:
Year
Project A
Project B
0
67000
82000
1
47000
46000
2
42000
55000
3
37000
58000
The cash flows of Project A are expressed in real terms while
those of Project B are expressed in nominal terms. The appropriate
nominal discount rate is 10 percent and the inflation rate is 2
percent.
Calculate the NPV for each project. (Do not round
intermediate calculations and round your answers to...
3. AICC is considering the following two projects: (2 pts) Project Year 0 1 2 3...
3. AICC is considering the following two projects: (2 pts)
Project Year 0 1 2 3 A Cash flows -$50 $15 $25 $25 B Cash flows
-$50 $20 $25 $30
a. If these projects are mutually exclusive, which project
should the company invest in based on the NPV and IRR if the WACC =
10%?
b. Calculate MIRR, payback period, and discounted payback period
for the project you chose to invest in from part A only.
The following are the cash flows of two projects: Year Project A Project B 0 ?$...
The following are the
cash flows of two projects:
Year
Project A
Project B
0
?$
380
?$
380
1
210
280
2
210
280
3
210
280
4
210
If the opportunity
cost of capital is 11%, what is the profitability index for each
project? (Do not round intermediate calculations. Round
your answers to 4 decimal places.)
The following are the cash flows of two projects: Year Project A Project B 0 ?$...
The following are the cash flows of two projects:
Year Project A Project B
0 ?$ 280 ?$ 280
1 160 180
2 160 180
3 160 180
4 160
If the opportunity cost of capital is 10%, what is the
profitability index for each project? (Do not round intermediate
calculations. Round your answers to 4 decimal places.) Project A
Profitability Index Project B
The following are the cash flows of two projects: Year Project A Project B 0 −$...
The following are the cash flows of two projects: Year Project A
Project B 0 −$ 290 −$ 290 1 170 190 2 170 190 3 170 190 4 170 If
the opportunity cost of capital is 11%, what is the profitability
index for each project? (Do not round intermediate calculations.
Round your answers to 4 decimal places.)
The following are the cash flows of two projects: Year Project A Project B 0 $...
The following are the cash flows of two projects:
Year
Project A
Project B
0
$
(330)
$
(330)
1
160
230
2
160
230
3
160
230
4
160
If the opportunity cost of capital is 12%, what is the
profitability index for each project? (Do not round
intermediate calculations. Round your answers to 4 decimal
places.)
Project Profitability Index:
A
B
The following are the cash flows of two projects: Year Project A Project B 0 ?$...
The following are the cash flows of two projects: Year Project A
Project B 0 ?$ 220 ?$ 220 1 100 120 2 100 120 3 100 120 4 100 If
the opportunity cost of capital is 10%, what is the profitability
index for each project? (Do not round intermediate calculations.
Round your answers to 4 decimal places.)
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Enumerations Create an advanced enumeration to represent months (JANUARY – DECEMBER) called enuMonths Add internal properties...
- What is the minimum size of the automorphism group of a simple directed graph having more...
- The birthday paradox says that the probability (chance) that two people in a room will have...
- #include <iostream> #include "lib.hpp" using namespace std; int main() { // declare the bool bool...
- Why do we compare means instead of individual scores? for comparing average SAT test scores across...
- NPV Your division is considering two projects with the following cash flows (in millions): 0...
- The equivalent synchronous impedance of a 25kVA, 400V three-phase Y-connected synchronous generator is 0.05 + j1.6...
ADVERTISEMENT