Question
In: Finance
($ thousands) Period 0 1 2 3 4 5 6 7 Net cash flow –14,000 –1,624...
($ thousands)
Period
0 1 2 3 4 5 6 7
Net cash flow –14,000 –1,624 3,087 6,463 10,674 10,125 5,897
3,409
Present value at 22% –14,000 –1,331 2,074 3,559 4,818 3,746
1,788 847
Net present value = 1,502 (sum of PVs)
Restate the above net cash flows in real terms. Discount the
restated cash flows at a real discount rate. Assume a 22% nominal
rate and 8% expected inflation. NPV should be unchanged at +1,502,
or $1,502,000. (Negative answers should be indicated by a minus
sign. Do not round intermediate calculations. Enter your answers in
thousands rounded to the nearest whole number.)
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Net cash flows (real)
Net present value $
Solutions
Expert Solution
Please refer to below spreadsheet for calculation and answer. Cell reference also provided.
Cell reference -
Please note :
jeff jeffy answered 1 month agoRelated Solutions
Investment A: Year: 0 1 2 3 4 5 Cash flow: -$14,000 $6,000 $6,000 $6,000 $6,000...
Investment A:
Year: 0 1 2 3 4 5
Cash flow: -$14,000 $6,000 $6,000 $6,000 $6,000 $6,000
Investment B:
Year: 0 1 2 3 4 5
Cash flow: -$15,000 $7,000 $7,000 $7,000 $7,000 $7,000
Investment C:
Year: 0 1 2 3 4 5
Cash flow: -$18,000 $12,000 $4,000 $4,000 $4,000 $4,000
The cash flows for three projects are shown above. The cost of
capital is 7.5%. If an investor decided to take projects with a
payback period two years or...
Net Present Value ApproachB7:H23 Time Period 0 1 2 3 4 5 Cash Flow Purchase Price...
Net
Present Value ApproachB7:H23
Time Period
0
1
2
3
4
5
Cash Flow
Purchase Price
$ (70,000)
Labor Savings
20,000
20,000
20,000
20,000
20,000
Paint Savings
2,000
2,000
2,000
2,000
2,000
Maintenance
-1000
(1,000)
(1,000)
(1,000)
(1,000)
(1,000)
Residual Value
5,000
5,000
Total Cash Flow
$ (70,000)
21,000
21,000
21,000
21,000
26,000
PV Factor
1
0.893
0.797
0.712
0.636
0.567
Total Cash Flow
$ (70,000)
$ 18,753
$ 16,737
$ 14,952
$ 13,356
$ 14,742
Required Rate of Return...
Consider the following cash flows: Year 0 1 2 3 4 5 6 Cash Flow -$10,000...
Consider the following cash flows:
Year 0 1 2 3 4 5 6
Cash Flow -$10,000 $2,200 $3,300 $2,500 $2,500 $2,300 $2,100
A. Payback The company requires all projects to payback within 3
years. Calculate the payback period. Should it be accepted or
rejected?
B. Discounted Payback Calculate the discounted payback using a
discount rate of 10%. Should it be accepted or rejected?
C. IRR Calculate the IRR for this project. Should it be accepted
or rejected?
D. NPV Calculate...
6 5 4 5 0 0 13 48 6 1 0 7 2 0 1 1...
6
5
4
5
0
0
13
48
6
1
0
7
2
0
1
1
0
2
11
5
11
27
4
0
6
Create Standard Deviation Chart (Normal Distribution
Curve)
Period 0 1 2 3 4 5 6 7 8 9 10 11 PBP NPV IRR...
Period
0
1
2
3
4
5
6
7
8
9
10
11
PBP
NPV
IRR
Project A
$
(1,000,000)
$ 200,000
$ 200,000
$ 200,000
$ 200,000
$ 200,000
$ 200,000
$ 200,000
$ 200,000
$ 200,000
$ 200,000
$ 400,000
Project B
$
(1,000,000)
$ 500,000
$ 500,000
$ 500,000
Project C
$
(80,000)
$ 1,040
$ 9,456
$ 11,405
$ 18,567
$ 47,453
$ 6,394
$ 45,727
$ 51,933
$ 85,625
Project D
$
(400,000)
$ 4,161...
Period 0 1 2 3 4 5 6 7 8 9 10 11 PBP NPV IRR...
Period
0
1
2
3
4
5
6
7
8
9
10
11
PBP
NPV
IRR
Project A
$
(1,000,000)
$ 200,000
$ 200,000
$ 200,000
$ 200,000
$ 200,000
$ 200,000
$ 200,000
$ 200,000
$ 200,000
$ 200,000
$ 400,000
Project B
$
(1,000,000)
$ 500,000
$ 500,000
$ 500,000
Project C
$
(80,000)
$ 1,040
$ 9,456
$ 11,405
$ 18,567
$ 47,453
$ 6,394
$ 45,727
$ 51,933
$ 85,625
Project D
$
(400,000)
$ 4,161...
exampleInput.txt 1 2 3 0 2 3 4 0 1 3 5 0 1 2 6...
exampleInput.txt
1 2 3
0 2 3 4
0 1 3 5
0 1 2 6
1 5 6 8
2 4 6 7
3 4 5 9 10
5 8 9
4 7 9
6 7 8
6
How can I detect when 'cin' starts reading from a new line. The
amount of numbers in each row is unknown. I need them in type 'int'
to use the data.
Consider the cash flow for projects A and B Year: 0, 1, 2, 3, 4, 5...
Consider the cash flow for projects A and B
Year: 0, 1, 2, 3, 4, 5
Project A: ($1000), 100, 600, 700, 900, 300
Project B: ($1000), 900, 700, 500, 300, 300
The cost of capital for both projects is 10%
1. Find NPV, IRR and profitability index (PI) of projects A and
B.
2. If projects A and B are mutually exclusive, which project
would you select
3. Find the crossover rate for projects A and B
Consider the cash flow for projects A and B Year: 0, 1, 2, 3, 4, 5
Consider the cash flow for projects A and B Year: 0, 1, 2, 3, 4, 5
Project A: ($1000), 100, 600, 700, 900, 300
Project B: ($1000), 900, 700, 500, 300, 300
The cost of capital for both projects is 10%
1. Find NPV, IRR and profitability index (PI) of projects A and B.
2. If projects A and B are mutually exclusive, which project would you select
3. Find the crossover rate for projects A and B
YEAR 1 2 3 4 5 6 7 8 CASH FLOW -4090 -559 9380 3743 416...
YEAR
1
2
3
4
5
6
7
8
CASH FLOW
-4090
-559
9380
3743
416
3276
-4677
-3074
a) Determine the maximum number of positive IRR roots for the
given cash flow according to Descartes Rule.
b) Determine the maximum number of positive IRR roots for the given
cash flow according to Norstrom
Criterion.
c) Find ERR of the given cash flow if ε=10% per year.
IN EXCEL PLZ!!
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