Question
In: Finance
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%
Solutions
jeff jeffy answered 9 months agoRelated Solutions
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?
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....
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)
1. A project has the following cash flows: C0 = -200,000; C1 = 50,000; C2 =...
1. A project has the following cash flows: C0 =
-200,000; C1 = 50,000; C2 = 100,000;
C3 = 150,000. If the discount rate changes from 10% to
15%, the CHANGE in the NPV of the project is closest to:
A.
$23,076 increase
B.
$23,076 decrease
C.
$9,667 decrease
D.
$9,667 increase
E.
None of the above
2.
Companies A and B are valued as follows:
Both companies are 100% equity financed. Company A now acquires
B by offering two...
A project has the following cash flows: C0 - $6,750; C1 - $4,500; C2 - $5,000....
A project has the following cash flows: C0 - $6,750; C1
- $4,500; C2 - $5,000. At a discount rate of 10%, the project’s NPV
- $1,473. We learned that as the discount rate is increased, the
NPV of a specific project will decrease. How high can the discount
rate be before you would reject the project?
A project has the following forecasted cash flows: Cash Flows Thousands of dollars C0 C1 C2 C
A project has the following forecasted cash flows:
Cash Flows
Thousands of dollars
C0 C1 C2 C3
-100 40
60
50
The investor expected rate of return is 10%. The cost of capital
is 12%.
Required:
What will you choose to be the discount rate? Why?
Please calculate the payback period (PP) and return on
investment (ROI).
Please calculate NPV，PVI and IRR..
Make decision based on the above calculation and explain the
reasons.
David said that the profit is the same as...
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
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Write a Java Program using the following instruction: Create the following 3 methods that calculate and...
- How would the S/D curves shift if a $3 tax was imposed on suppliers for each...
- Why should a time-based authentication system invalidate the current password on a successful authentication?
- Explain the difference between a market penetration strategy and a market development strategy.
- QUESTION 4 Discuss the sanctity of life versus the quality of life debate as presented by...
- 0.560 g He, 20.482 g F2, and 13.960 g Ar are placed in a 18.4-L container...
- Let X ∼ Pois(4), Y ∼ Pois(12), U ∼ Pois(3) be independent random variables. a) What...
ADVERTISEMENT