Question
In: Finance
For the project shown in the following table, LOADING... , calculate the internal rate of return...
For the project shown in the following table,
LOADING...
,
calculate the internal rate of return
(IRR).
Then indicate, for the project, the maximum cost of capital that the firm could have and still find the IRR acceptable.
|
Initial investment
(CF 0CF0) |
$160 comma 000160,000 |
|
|||||||||||
|
Year
(t) |
Cash inflows
(CF Subscript tCFt) |
||||||||||||
|
1 |
$45 comma 00045,000 |
||||||||||||
|
2 |
$50 comma 00050,000 |
||||||||||||
|
3 |
$45 comma 00045,000 |
||||||||||||
|
4 |
$30 comma 00030,000 |
||||||||||||
|
5 |
$35 comma 00035,000 |
||||||||||||
The project's IRR is __ %
(Round to two decimal places.)
Solutions
Expert Solution
SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE
jeff jeffy answered 3 weeks agoRelated Solutions
P10–14 Internal rate of return For each of the projects shown in the following table, calculate the...
P10–14 Internal rate of return For
each of the projects shown in the following table, calculate the
internal rate of return (IRR). Then indicate, for each project, the
maximum cost of capital that the firm could have and still find the
IRR acceptable. I DO NOT HAVE A FINANCIAL CALCULATOR OR I
CANNOT USE EXCEL SPREADSHEETS; CAN YOU PLEASE BREAK IT DOWN ON HOW
TO FIND THE IRR....THANKS IN ADVANCE
Project B
Project C
Initial investment
(CF0)
−$490,000
−$20,000
Year (t)...
Calculate the net present value, internal rate or return and payback period for an investment project...
Calculate the net present value, internal rate or return and
payback period for an investment project with the following cash
flows using a 5 percent cost of capital:
Year
0
1
2
3
Net Cash Flow
-$150,000
$62,000 $62,000 $62,000
Do you recommend the investment?
Calculate the internal rate of return on the following projects: Initial outlay of $50,000 with an...
Calculate the internal rate of return on the following
projects:
Initial outlay of $50,000 with an after-tax cash flow of
$10,000 per year for eight years.
Initial outlay of $600,000 with an after-tax cash flow of
$120,000 per year for ten years.
Initial outlay of $25,000 with an after-tax cash flow $11,500
per year for three years.
Calculate the payback period, net present value, profitability index, and internal rate of return for Project...
Calculate the payback period, net present value, profitability
index, and internal rate of return for Project A. Assume a discount
rate of 20%. Should the firm accept or reject Project A? Explain.
If the firm must choose between Project A and Project B, which is
the better choice? Explain. Under what circumstances should the
modified internal rate of return be used instead of the standard
internal rate of return?
Project A
Project B
Year
Cash Flow
Year
Cash Flow
0...
Calculate the Internal Rate of Return of each of the following potential investments and recommend whether...
Calculate the Internal Rate of Return of each of the following
potential investments and recommend whether or not to include them
in the upcoming capital budget given that the firm’s cost of
capital is 14.5%.
New Software:
Initial
Cost
$25,000
Training
Cost
$12,000
Annual Cost
Savings
$10,500
Useful
Life
6 Years
Machine A or Machine B
Note: The key word here is “or”.
One or the other machine must be bought. So, the analysis should be
based on the incremental...
Calculate the Internal Rate of Return of each of the following potential investments and recommend whether...
Calculate the Internal Rate of Return of each of the following
potential investments and recommend whether or not to include them
in the upcoming capital budget given that the firm’s cost of
capital is 14.5%.
New Software:
Initial
Cost
$25,000
Training
Cost
$12,000
Annual Cost Savings
$10,500
Useful
Life
6 Years
Machine A or Machine B
Note: The key word here is “or”.
One or the other machine must be bought. So, the analysis should be
based on the incremental...
Payback, Accounting Rate of Return, Net Present Value, Internal Rate of Return Follow the format shown...
Payback, Accounting Rate of Return, Net Present Value, Internal
Rate of Return
Follow the format shown in Exhibit 14B-1 and Exhibit 14B-2 as
you complete the requirements below.
Booth Company wants to buy a numerically controlled (NC) machine
to be used in producing specially machined parts for manufacturers
of tractors. The outlay required is $960,000. The NC equipment will
last 5 years with no expected salvage value. The expected after-tax
cash flows associated with the project follow:
Year
Cash Revenues...
What is the modified internal rate of return for a 3-year project with the following characteristics?...
What is the modified internal rate of return for a 3-year
project with the following characteristics?
Cash flow at time year 0 = -$100,000
Cash flow at time year 1 = $50,000
Cash flow at time year 2 = $50,000
Cash flow at time year 3 = $50,000
Corporate cost of capital = 10%
21%
30%
18%
15%
Determine the internal rate of return on the following project: An initial outlay of 9000 resulting...
Determine the internal rate of return on the following project:
An initial outlay of 9000 resulting in a cash inflow of 1800 at the
end of year 1, 4800 at the end of year 2, and 7800 at the end of
year 3
What is the internal rate of return (IRR) of this project given the following cash flows?...
What is the internal rate of return (IRR) of this project given
the following cash flows?
Year
CF
0
-$9,800
1
$1,000
2
$4,500
3
$1,000
4
$1,500
5
$1,700
6
$2,700
Convert your answer to percentage and round off to two decimal
points. Do not enter % in the answer box.
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