Question
In: Finance
McCann Co. has identified an investment project with the following cash flows. Year Cash Flow 1...
McCann Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $750 2 1,080 3 1,270 4 1,120
a. If the discount rate is 11 percent, what is the present value of these cash flows?
b. What is the present value at 18 percent?
c. What is the present value at 28 percent?
Solutions
Expert Solution
PV of cash flows = CF1 / (1 + R)^1 + CF2 / (1 + R)^2 + CF3 / (1 + R)^3 + CF4 / (1 + R)^4
When I = 11%
PV = 750 / (1 + 11%) + 1080 / (1 + 11%)^2 + 1270 / (1 + 11%)^3 + 1120 / (1 + 11%)^4
= $3218.62
When I = 18%
PV = 750 / (1 + 18%) + 1080 / (1 + 18%)^2 + 1270 / (1 + 18%)^3 + 1120 / (1 + 18%)^4
= 2761.88
When I = 28%
PV = 750 / (1 + 28%) + 1080 / (1 + 28%)^2 + 1270 / (1 + 28%)^3 + 1120 / (1 + 28%)^4
= 2267.93
jeff jeffy answered 2 years agoRelated Solutions
McCann Co. has identified an investment project with the following cash flows. Year Cash Flow 1 ...
McCann Co. has identified an investment project with the following
cash flows.
Year Cash Flow
1 $950
2 1,000
3 1,220
4 1,170
a.
If the discount rate is 10 percent, what is the present value of
these cash flows?
b.
What is the present value at 17 percent?
c. What is the present value at 29 percent?
McCann Co. has identified an investment project with the following cash flows. Year Cash Flow 1...
McCann Co. has identified an investment project with the
following cash flows.
Year
Cash Flow
1
$800
2
1,040
3
1,270
4
1,150
a.
If the discount rate is 9 percent, what is the present value of
these cash flows?
b.
What is the present value at 17 percent?
c.
What is the present value at 26 percent?
McCann Co. has identified an investment project with the following cash flows. Year Cash Flow 1...
McCann Co. has identified an investment project with the
following cash flows.
Year
Cash Flow
1
$900
2
1,040
3
1,330
4
1,160
a.
If the discount rate is 11 percent, what is the present value of
these cash flows?
b.
What is the present value at 20 percent?
c.
What is the present value at 27 percent?
Please be specific and provide formulas
McCann Co. has identified an investment project with the following cash flows. Year Cash Flow 1...
McCann Co. has identified an investment project with the
following cash flows. Year Cash Flow 1 $900 2 1,040 3 1,280 4 1,110
a. If the discount rate is 12 percent, what is the present value of
these cash flows? b. What is the present value at 19 percent?
Consider the following two mutually exclusive projects: Year
Cash Flow (A) Cash Flow (B) 0 –$272,703 –$15,035 1 27,800 4,583 2
52,000 8,185 3 58,000 13,305 4 389,000 9,509 Whichever project...
McCann Co. has identified an investment project with the following cash flows. Year Cash Flow 1...
McCann Co. has identified an investment project with the
following cash flows.
Year
Cash Flow
1
$950
2
1,050
3
1,260
4
1,140
a.
If the discount rate is 9 percent, what is the present value of
these cash flows?
b.
What is the present value at 18 percent?
c.
What is the present value at 29 percent?
Rooster Co. has identified an investment project with the following cash flows. Year Cash Flow 1...
Rooster Co. has identified an investment project with the
following cash flows.
Year
Cash Flow
1
$
1,190
2
1,090
3
1,540
4
1,900
Requirement 1:
If the discount rate is 10 percent, what is the present value of
these cash flows? (Enter rounded answer as
directed, but do not use rounded numbers in intermediate
calculations. Round your answer to 2 decimal
places (e.g., 32.16).)
Present value
$
Requirement 2:
What is the present value at 18 percent?
(Enter rounded...
Seaborn Co. has identified an investment project with the following cash flows. Year Cash Flow 1...
Seaborn Co. has identified an investment project with the
following cash flows.
Year
Cash Flow
1
$800
2
1,050
3
1,230
4
1,140
Required:
(a)
If the discount rate is 10 percent, what is the present value of
these cash flows?
(b)
What is the present value at 16 percent?
(c)
What is the present value at 26 percent?
Seaborn Co. has identified an investment project with the following cash flows. Year Cash Flow 1...
Seaborn Co. has identified an investment project with the
following cash flows.
Year
Cash Flow
1
$900
2
1,100
3
1,270
4
1,160
Required:
(a)
If the discount rate is 11 percent, what is the present value of
these cash flows?
(Click to
select)3,769.934,430.003,396.343,321.653,473.74
(b)
What is the present value at 18 percent?
(Click to
select)4,430.003,450.312,865.183,754.232,923.99
(c)
What is the
present value at 30 percent?
(Click to
select)2,369.194,430.002,327.402,286.823,025.63
Eulis Co. has identified an investment project with the following cash flows. Year Cash Flow 1...
Eulis Co. has identified an investment project with the
following cash flows.
Year
Cash Flow
1
$
1,290
2
1,240
3
1,590
4
1,950
If the discount rate is 9 percent, what is the present value of
these cash flows? (Do not round intermediate calculations
and round your answer to 2 decimal places, e.g.,
32.16.)
Present value
$
What is the present value at 17 percent? (Do not round
intermediate calculations and round your answer to 2 decimal
places, e.g.,...
Fox Co. has identified an investment project with the following cash flows. Year Cash Flow 1...
Fox Co. has identified an investment project with the following
cash flows.
Year
Cash Flow
1
$
1,230
2
1,150
3
1,560
4
1,920
a.
If the discount rate is 11 percent, what is the present value of
these cash flows? (Do not round intermediate calculations
and round your answer to 2 decimal places, e.g.,
32.16.)
b.
What is the present value at 16 percent? (Do not round
intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- The Facts: Ann and Bill decided to start a coffee shop. They agreed Bill would provide...
- MARGI sells different types of wine. Customers place orders to the most popular “Summer Wine” at...
- A firm's bonds have a maturity of 8 years with a $1,000 face value, have an...
- Naive reasoning suggests that a string theory vacuum with cosmological constant Lambda1 is always unstable as...
- I. Design and code a class Rectangle that has the following properties: Two private members double...
- A bond has a $1,000 par value, 10 years to maturity, and an 8% annual coupon...
- The following are the monthly rates of return for Madison Cookies and for Sophie Electric during...
ADVERTISEMENT