Question
In: Finance
If you invest 3000 today and expect to profit $200 a year for 10 years what...
If you invest 3000 today and expect to profit $200 a year for 10 years what id the IRR on the investment?
Solutions
Expert Solution
| Project | |||||||||||
| IRR is the rate at which NPV =0 | |||||||||||
| IRR | -0.067657639 | ||||||||||
| Year | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
| Cash flow stream | -3000 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 |
| Discounting factor | 1 | 0.932342 | 0.869262 | 0.81045 | 0.7556169 | 0.704494 | 0.656829 | 0.61239 | 0.570957 | 0.532327 | 0.496311 |
| Discounted cash flows project | -3000 | 214.5135 | 230.0802 | 246.7765 | 264.68439 | 283.8918 | 304.4931 | 326.5894 | 350.2891 | 375.7087 | 402.9729 |
| NPV = Sum of discounted cash flows | |||||||||||
| NPV Project = | -0.00043689 | ||||||||||
| Where | |||||||||||
| Discounting factor = | (1 + IRR)^(Corresponding period in years) | ||||||||||
| Discounted Cashflow= | Cash flow stream/discounting factor | ||||||||||
| IRR= | -6.77% | ||||||||||
jeff jeffy answered 1 year agoRelated Solutions
a) You invest $117 today and expect to receive $183 in 13 years. What interest rate...
a)
You invest $117 today and expect to receive $183 in 13 years. What
interest rate are you expecting to earn? (Put rate in 4 decimal
places.)
b) You invest $291 at the end of each year for 25 years in an
account earning 6.9%. How much do you expect to be able to withdraw
in 25 years? (Note this is an ordinary annuity.)
Suppose you invest $100,000 in a C corporation for 10 years. You expect the corporation to...
Suppose you invest $100,000 in a C corporation for 10 years.
You expect the corporation to earn 8% pa before any corporate taxes
and any investor level taxes. The firm does not plan to
pay any dividends over the 10 year period. You currently face a 40%
tax rate on ordinary income, and 20% tax rate on capital
gains. The corporation faces a tax rate of
35%. The tax rates are not expected to change.
What is your after-tax dollar accumulation at the...
If you invest $81,000 today at 10% interest for 19 years, you will have $_________ in...
If you invest $81,000 today at 10% interest for 19 years, you
will have $_________ in 19 years.
(Do not include the dollar signs ($). Round your answers to 2
decimal places. (e.g., 32.16))
You are 25 years old and plan to retire 35 year from today. You expect that...
You are 25 years old and plan to retire 35 year from today. You
expect that you will live 30 years after retiring. You want to have
enough money upon reaching retirement age to withdraw $150,000 from
the account at the beginning of each year you expect to live, and
yet still have $1,000,000 left in the account at the time of your
expected death (65 years from now). You plan to accumulate the
retirement fund by making equal annual...
You are 25 years old and plan to retire 35 year from today. You expect that...
You are 25 years old and plan to retire 35 year from today. You
expect that you will live 30 years after retiring. You want to have
enough money upon reaching retirement age to withdraw $150,000 from
the account at the beginning of each year you expect to live, and
yet still have $1,000,000 left in the account at the time of your
expected death (65 years from now). You plan to accumulate the
retirement fund by making equal annual...
You invest $5,000 in the stock market today and you expect a return of 7% annually....
You invest $5,000 in the stock market today and you expect a return
of 7% annually. What do you expect this investment to be worth in
20 years? How many years will it take for this investment to double
in value?
Recalculate
your answers
with a return of 7% quarterly.
Describe how the investment grows
over time
using terminology.
If you invest $1,000 today at an interest rate of 10% per year, how much will...
If you invest $1,000 today at an interest rate of 10% per year,
how much will you have 20 years from now, assuming no withdrawals
in the interim?
What is the present value of the following cash flows at an
interest rate of 10% per year?
$100 received five years from now.
$100 received 60 years from now.
$100 received each year beginning one year from now and ending
10 years from now.
$100 received each year for 10 years...
Today, you invest $7,000 in an investment that will pay $14,000in 11 years. What is...
Today, you invest $7,000 in an investment that will pay $14,000
in 11 years. What is the implied rate of interest?
Today, you invest $3,000 in an investment that will pay $6,000 in 7 years. What is...
Today, you invest $3,000 in an investment that will pay $6,000
in 7 years. What is the implied rate of interest?
How much should be invested each year for 10 years to provide you with $3000 per...
How much should be invested each year for 10 years to provide
you with $3000 per year for the next 35 years? Assume a 4.5%
interest rate. (Round your final answer to two decimal places.)
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- How Can Hominin Evolution be characterized as " mosaic evolution" Use examples of species from the...
- Absorption and Variable Costing Income Statements for Two Months and Analysis During the first month of...
- Mobile and wireless devices are being increasingly used in the Business Administration and Management Industry. write...
- What are the options that might be considered in relation to introducing flexible work practices? What...
- Question 2 : Aggregate Scores: Write a program that opens 2 files, quiz.txt, and hw.txt. The...
- Define the term symbiosis specifically as it applies in a biological context. Compare and contrast parasitism,...
- A research team conducted a study showing that approximately 20% of all businessmen who wear ties...
ADVERTISEMENT