Question
In: Finance
Here are the cash flows for a project under consideration: C0 = -$6750 C1 = $4500...
Here are the cash flows for a project under consideration:
C0 = -$6750
C1 = $4500
C2 = $18000
A. Calculate the project's net present value for discount rates of 0, 50%, and 100%.
B. What is the IRR of the project?
Please show work.
Solutions
jeff jeffy answered 3 years agoRelated Solutions
Here are the cash flows for two mutually exclusive projects: Project C0 C1 C2 C3 A...
Here are the cash flows for two mutually exclusive projects:
Project
C0
C1
C2
C3
A
−$
23,000
+$
10,120
+$
10,120
+$
10,120
B
−
23,000
0
0
+
31,050
What is the IRR of each project? (Round your answers to
2 decimal places.)
Here are the cash flows for two mutually exclusive projects: Project C0 C1 C2 C3 A...
Here are the cash
flows for two mutually exclusive projects:
Project
C0
C1
C2
C3
A
−$
21,800
+$
9,592
+$
9,592
+$
9,592
B
−
21,800
0
0
+
29,430
What is the IRR of each project? (Round your answers to 2
decimal places.)
PRoject A %
Project B %
A project has the following cash flows : C0 C1 &nb
A project has the following cash flows :
C0
C1
C2
+6,750
+4,500
-18,000
Calculate the NPV of the project for a
discount rate of i) 0% ii)33% iii) 50% and iv) 100%.
Which discount rate provides the largest NPV?
a)
0%
b)
33%
c)
50%
d)
100%
1. The following cash flows are given for the Project Z _________________________________________________________ C0 C1&
1. The following cash flows are given for the Project
Z
_________________________________________________________
C0
C1
C2
C3
C4
C5
-$7000 +$3,000 +$4,000
+$6,000
+$2,500 +$2,000
_________________________________________________________
Calculate the
following: (a) NPV (Net
Present Value) at 12% discount rate
(b) IRR (Internal Rate of
Return)
(c)
The payback period for Project (Z)
Cash flows of Project A and B are as following: Project C0 C1 C2 C3 C4...
Cash flows of Project A and B are as following:
Project
C0
C1
C2
C3
C4
C5
A
-9000
2000
3000
4000
5000
6000
B
-11000
2000
3000
4000
5000
6000
Compute the
payback periods for the following two projects.
Payback period
for A = _________ years; for B __________years
If the discount
rate is 10%, what is the discounted payback period?
Discounted
payback period for A=_________ years; for B __________years
A project has the following forecasted cash flows: Cash Flows ($ thousands) C0 C1 C2 C3...
A project has the following forecasted cash flows:
Cash Flows ($ thousands)
C0
C1
C2
C3
−155
+95
+115
+105
The estimated project beta is 1.51. The market return
rm is 15%, and the risk-free rate
rf is 3%.
a. Estimate the opportunity cost of capital and
the project’s PV (using the same rate to discount each cash flow).
(Do not round intermediate calculations. Enter your cost of
capital answer as a percent and enter your PV answer in thousands....
A project has the following forecasted cash flows: Cash Flows ($ thousands) C0 C1 C2 C3...
A project has the following forecasted cash flows:
Cash Flows ($ thousands)
C0
C1
C2
C3
−125
+67
+85
+75
The estimated project beta is 1.55. The market return
rm is 17%, and the risk-free rate
rf is 7%.
a. Estimate the opportunity cost of capital and
the project’s PV (using the same rate to discount each cash flow).
(Do not round intermediate calculations. Enter your cost of
capital answer as a percent and enter your PV answer in thousands....
A project has the following forecasted cash flows: Cash Flows ($ thousands) C0 C1 C2 C3...
A project has the following forecasted cash flows: Cash Flows ($
thousands) C0 C1 C2 C3 −190 +130 +150 +140 The estimated project
beta is 1.58. The market return rm is 18%, and the risk-free rate
rf is 5%.
a. Estimate the opportunity cost of capital and the project’s PV
(using the same rate to discount each cash flow). (Do not round
intermediate calculations. Enter your cost of capital answer as a
percent and enter your PV answer in thousands....
A project has the following forecasted cash flows: Cash Flows ($ thousands) C0 C1 C2 C3...
A project has the following forecasted cash flows:
Cash Flows ($ thousands)
C0
C1
C2
C3
−125
+67
+85
+75
The estimated project beta is 1.55. The market return
rm is 17%, and the risk-free rate
rf is 7%.
a. Estimate the opportunity cost of capital and
the project’s PV (using the same rate to discount each cash flow).
(Do not round intermediate calculations. Enter your cost of
capital answer as a percent and enter your PV answer in thousands....
A company is considering a project that has the following cash flows: C0 = -5,000, C1...
A company is considering a project that has the following cash
flows: C0 = -5,000, C1 = +900, C2 = +2,500, C3 = +1,100, and C4 =
+2,900 with a risk-adjusted discount rate of 12%. a) Calculate the
Net Present Value (NPV), Internal Rate of Return (IRR),
Profitability Index, and the Payback of this project. b) If you
were the manager of the firm, will you accept or reject the project
based on the calculation results above?
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