Question

In: Finance

Compute the NPV for Project K if the appropriate cost of capital is 7 percent. (Negative...

Compute the NPV for Project K if the appropriate cost of capital is 7 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.)

Project K
Time: 0 1 2 3 4 5
Cash flow: −$11,600 $5,800 $6,800 $6,800 $5,800 −$14,600



Should the project be accepted or rejected?

  • rejected

  • accepted

Solutions

Expert Solution

NPV :
NPV = PV of Cash Inflows - PV of Cash Outflows
If NPV > 0 , Project can be accepted
NPV = 0 , Indifference point. Project can be accepted/ Rejected.
NPV < 0 , Project will be rejected.

Cash Flows for 5 Years
Year CF PVF @0.07 Disc CF
0 $ -11,600.00     1.0000 $ -11,600.00
1 $    5,800.00     0.9346 $    5,420.56
2 $    6,800.00     0.8734 $    5,939.38
3 $    6,800.00     0.8163 $    5,550.83
4 $    5,800.00     0.7629 $    4,424.79
5 $ -14,600.00     0.7130 $ -10,409.60
NPV $      -674.04

As NPV is -ve, Reject the Project.

Pls do rate, if the answer is correct and comment, if any further assistance is required.

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Compute the NPV for Project M if the appropriate cost of capital is 7 percent. (Negative...
Compute the NPV for Project M if the appropriate cost of capital is 7 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.)       Project M   Time: 0 1 2 3 4 5   Cash flow –$2,000 $550 $680 $720 $800 $300         NPV $       Should the project be accepted or rejected? Accepted Rejected
Compute the NPV for Project M if the appropriate cost of capital is 9 percent. (Negative...
Compute the NPV for Project M if the appropriate cost of capital is 9 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) Project M Time: 0 1 2 3 4 5 Cash flow: –$1,200 $390 $520 $560 $640 $140 NPV? Should it be accepted or rejected
Compute the NPV for Project M if the appropriate cost of capital is 9 percent. (Negative...
Compute the NPV for Project M if the appropriate cost of capital is 9 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) Should the project be accepted or rejected? Project M Time: 0 1 2 3 4 5 Cash flow: –$1,500 $450 $580 $620 $700 $200 How do you come up with the NPV? And Should the project be accepted or rejected?
Compute the NPV for Project M if the appropriate cost of capitalis 8 percent. (Negative...
Compute the NPV for Project M if the appropriate cost of capital is 8 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.)Project MTime:012345Cash flow:–$2,900$650$780$820$900$400NPV:Should the project be accepted or rejected?rejectedaccepted
Compute the NPV statistic for Project Y if the appropriate cost of capital is 12 percent....
Compute the NPV statistic for Project Y if the appropriate cost of capital is 12 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) Project Y Time: 0 1 2 3 4 Cash flow: –$9,200 $3,590 $4,420 $1,760 $540 NPV: Should the project be accepted or rejected? accepted rejected
Compute the NPV statistic for Project U if the appropriate cost of capital is 9 percent....
Compute the NPV statistic for Project U if the appropriate cost of capital is 9 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.)       Project U   Time: 0 1 2 3 4 5   Cash flow –$1,050 $370 $1,530 –$530 $320 –$110
Compute the NPV statistic for Project Y if the appropriate cost of capital is 11 percent....
Compute the NPV statistic for Project Y if the appropriate cost of capital is 11 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) Project Y Time: 0 1 2 3 4 Cash flow: –$8,100 $3,370 $4,200 $1,540 $320
Compute the NPV statistic for Project U if the appropriate cost of capital is 10 percent....
Compute the NPV statistic for Project U if the appropriate cost of capital is 10 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project U Time: 0 1 2 3 4 5 Cash flow: –$1,000 $350 $1,480 –$520 $300 –$100 show how to do this in excel and the excel formulas You have to show what the excel formulas are pls
Compute the IRR static for Project E. The appropriate cost of capital is 7 percent. (Do...
Compute the IRR static for Project E. The appropriate cost of capital is 7 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project E Time: 0 1 2 3 4 5 Cash flow –$1,400 $510 $600 $600 $380 $180 Should the project be accpeted or rejected?
Compute the IRR static for Project E. The appropriate cost of capital is 7 percent. (Do...
Compute the IRR static for Project E. The appropriate cost of capital is 7 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.)        Project E   Time: 0 1 2 3 4 5   Cash flow –$2,000 $750 $780 $720 $500 $300        IRR %    Should the project be accepted or rejected? Accepted Rejected
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT