Question
In: Finance
Given a project with the following cash flows and a cost of capital of 9%. Calculate...
Given a project with the following cash flows and a cost of capital of 9%. Calculate the NPV, IRR, MIRR, PI, payback and discounted payback. For each of the six calculations, give a brief interpretation of what it measures and how it should be used to evaluate a project. Should the project be accepted? Why or why not?
Time Period Cash Flow
0 -$200,000
1 $50,000
2 $70,000
3 -$80,000
4 $75,000
5 $100,000
6 $120,000
Solutions
jeff jeffy answered 7 months agoRelated Solutions
Given the following cash flows for a capital project, calculate its payback period and discounted payback...
Given the following cash flows for a capital project, calculate
its payback period and discounted payback period. The required rate
of return is 8 percent. Year 0 1 2 3 4 5 Cash Flows $-37500 $11250
$11250 $15000 $6000 $6000 The discounted payback period is 0.16
year longer than the payback period. 0.80 year longer than the
payback period. 1.27 years longer than the payback period. 1.85
years longer than the payback period.
Given the following cash flows for a proposed capital investment project, calculate the payback period. Year...
Given the following cash flows for a proposed capital investment
project, calculate the payback period.
Year
Cash Flow
0
-$40,000
1
15,000
2
15,000
3
15,000
4
15,000
5
10,000
6
10,000
Question 4 options:
5.50 years
3.33 years
4.33 years
2.67 years
Given the following cash flows for a capital project, calculate its payback period and discounted payback...
Given the following cash flows for a capital project, calculate
its payback period and discounted payback period. The required rate
of return is 8 percent.
Year
0
1
2
3
4
5
Cash Flows
$-56900
$13650
$18050
$25200
$10000
$5000
The discounted payback period is
You are considering the following project. Your cost of capital is 8%. The cash flows are...
You are considering the following project. Your cost of capital
is 8%. The cash flows are as follow:
Year
0
1
2
3
4
-1000
300
500
300
300
What is the NPV of the project?
A.
165
B.
296
C.
400
D.
1400
Given the following, calculate the cash flows for the project. Initial investment $365,000 Expected life is...
Given the following, calculate the cash flows for the
project.
Initial investment $365,000
Expected life is 5 years
First Year Revenues: 245,000
First Year Expenses: $70,000
Growth for revenue and expenses: 3 percent per year
Straight Line Depreciation over 5 years
Salvage Value: $45,000
One-time net working capital investment of $10,000 required at
the start of the project
This investment is recovered at the end of the project
The tax rate is 34 percent
Answer the following:
What are the...
1. Given the following set of cash flows for a project, calculate the Payback, Discounted Payback...
1. Given the following set of cash flows for a project,
calculate the Payback, Discounted Payback and Accounting Rate of
Return. Assume a cost of capital of 10%. Assuming that this is an
independent project, should the project be accepted? Why or why
not?
Year
Cash
Flow
Net
Profit
Depreciation
0
-$125,000
1
$22,000
$15,000
$10,000
2
$58,000
$43,000
$25,000
3
-$30,000
$24,000
$21,000
4
$35,000
$28,000
$18,000
5
$28,000
$20,000
$15,000
6
$60,000
$52,000
$11,000
And now Construct an...
The project has the following cash flows and salvage values and cost of capital 8%: Year...
The project has the following cash flows and salvage
values and cost of capital 8%:
Year
Cash flows
Salvage
0
-5000
4000
1
2500
3500
2
3200
1800
3
1600
900
4
1000
0
What are the physical life and the economic life for
this project?
A. Physical life of this project is 3 years with economic life of 4
years.
B. Physical life of this project is 4 years with economic life of 1
year.
C. Physical life of...
2. Given the following expected cash flows for two projects, and an opportunity cost of capital...
2. Given the following expected cash flows for two projects, and
an opportunity cost of capital of 10%, which project is better and
why? (10 points)
Expected Net Cash Flows
Year Project
A Project B
0
-$10,000
-$10,000
1
$5000
$0
2
$5000
$0
3
$5000
$8,000
4
$5000
$2,000
3. Given the following expected cash flows for two projects, and
an opportunity cost of capital of 8%, which project is better and
why? (10 points)
Expected Net...
Project A has the following Cash Flows: Cost = $1,200,000; Cash flows the following years as...
Project A has the following Cash Flows: Cost = $1,200,000; Cash
flows the following years as follows: Year 1 = $274,600; Year 2 =
$298,000; Year 3 = $303,950; Year 4 = $312,875; and Year 5 =
$374,600. Calculate the Traditional Payback. Assume cash flows are
even throughout the year. Calculate the Net Present Value using the
WACC = 8.28%.
Consider the below estimated cash flows for Project A. Assume the cost of capital is 8%.
Consider the below estimated cash flows for Project A. Assume the cost of capital is 8%.
Year
Project A
0
($30,000)
1
$8,000
2
$9,000
3
$7,000
4
$10,000
8. Find the net present value (NPV) of Project A’s projected cash flows.
a.
$4,000
b.
($3,200)
c.
($1,824)
d.
$1,754
e.
($1,969)
9. Find the Internal Rate of Return (IRR) Project A’s projected cash flows.
a.
13.3%
b.
8.0%
c.
6.3%
...
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