Suppose you are offered $8,700 today but must make the following payments: Year Cash Flows 0...

Suppose you are offered $8,700 today but must make the following payments:

Year Cash Flows

0 $ 8,700

1 −3,900

2 −2,900

3 −2,300

4 −1,800

a. What is the IRR of this offer? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

b. If the appropriate discount rate is 10 percent, should you accept this offer?

c. If the appropriate discount rate is 20 percent, should you accept this offer?

d-1.	What is the NPV of the offer if the appropriate discount rate is 10 percent?
d-2.	What is the NPV of the offer if the appropriate discount rate is 20 percent?

Expert Solution

jeff jeffy answered 2 years ago

Suppose you are offered $8,000 today but must make the following payments: Year Cash Flows ($)...

Suppose you are offered $8,000 today but must make the following payments: Year Cash Flows ($) 0 $ 8,000 1 ?4,300 2 ?3,000 3 ?2,100 4 ?1,300 a. What is the IRR of this offer? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) IRR 14.81 % b. If the appropriate discount rate is 13 percent, should you accept this offer? Reject Accept c. If the appropriate discount rate is 20...

Suppose you are offered a project with the following payments year cash flows 0 $10,600 1...

Suppose you are offered a project with the following payments year cash flows 0 $10,600 1 -4,900 2 -4,400 3 -3,400 4 -2,700 A/ what is the IRR of this offer? B/ If the appropriate discount rate is 14 percent, should you accept this offer? C/ If the appropriate discount rate is 24 percent, should you accept the offer? D-1/ What is the NPV of the offer if the appropriate discount rate is 14 percent? D-2? What is the NPV...

For the following set of cash flows, Year Cash Flow 0 –$8,700 Year1 Cash Flow $5,600...

For the following set of cash flows, Year Cash Flow 0 –$8,700 Year1 Cash Flow $5,600 Year 2 Cash Flow $6,100 Year 3 Cash Flow $4,300 a. What is the NPV at a discount rate of 0 percent? b. What is the NPV at a discount rate of 12 percent? c. What is the NPV at a discount rate of 24 percent? d. What is the NPV at a discount rate of 29 percent?

If today is Year 0, what is the future value of the following cash flows 6 years from now?

If today is Year 0, what is the future value of the following cash flows 6 years from now? Assume an interest rate of 5.0 percent per year.YearCash Flow2$8,5003$9,3006$7,100 Group of answer choices$21,041.57$23,266.73$25,653.05$28,197.72$30,143.44

You are analyzing a project with the following cash flows: Year 0: -240,000 Year 1: +...

You are analyzing a project with the following cash flows: Year 0: -240,000 Year 1: + 10,000 Year 2: + 55,000 Year 3: +100,000 Year 4: +380,000 What is the NPV for this project, using a 15% discount rate? Multiple Choice The Project has an NPV of $69,281 The Project has an NPV of $58,445 The Project has an NPV of $70,617 The Project has an NPV of $93,301 What is the IRR for this project? Multiple Choice The Project...

You are offered the chance to participate in a project that produces the following cash flows:...

You are offered the chance to participate in a project that produces the following cash flows: C0 C1 C2 + $ 5,900 + $ 4,450 − $ 12,800 The internal rate of return is 14.3%. a. If the opportunity cost of capital is 13%, what is the net present value of the project? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) b. Will you accept the offer?

Calculating 'cash flows at the end' Today (Year 0), Kangaroo Enterprises is evaluating whether to purchase...

Calculating 'cash flows at the end' Today (Year 0), Kangaroo Enterprises is evaluating whether to purchase a new jetboat to operate scenic thrill rides around Lord Howe Island. The company currently has two other boats offering a snorkelling tour and a glass bottom boat tour. The jetboat costs $1,800,000. The jetboat project is expected to last ten years. The Australian Tax Office states the jetboat should be depreciated to zero over a 15-year life. In Year 0, the new jetboat...

You have 3 projects with the following cash flows: Year 0 1 2 ...

You have 3 projects with the following cash flows: Year 0 1 2 3 4 Project 1 -$149 $19 $42 $61 $79 Project 2 -827 0 0 7,002 -6,508 Project 3 18 39 62 81 -247 a. For which of these projects is the IRR rule reliable?_______. b. Estimate the IRR for each project (to the nearest 1 %).________. c. What is the NPV of each project if the cost of capital is 5...

What is the IRR of the following set of cash flows? Year Cash Flow 0...

What is the IRR of the following set of cash flows? Year Cash Flow 0 –$11,768 1 6,500 2 5,400 3 6,200 24.09% 25.36% 26.63% 25.87% 24.85%

There is a project with the following cash flows : Year Cash Flow 0 −$21,800 1...

There is a project with the following cash flows : Year Cash Flow 0 −$21,800 1 6,300 2 7,350 3 6,750 4 4,400 What is the payback period? Multiple Choice a. 4.00 years b. 3.32 years c. 3.74 years d. 3.56 years e. 2.79 years

Question