Suppose you are offered $8,000 today but must make the following payments: Year Cash Flows ($)...

Suppose you are offered $8,000 today but must make the following payments: Year Cash Flows ($) 0 $ 8,000 1 ?4,300 2 ?3,000 3 ?2,100 4 ?1,300 a. What is the IRR of this offer? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) IRR 14.81 % b. If the appropriate discount rate is 13 percent, should you accept this offer? Reject Accept c. If the appropriate discount rate is 20 percent, should you accept this offer? Reject Accept d-1. What is the NPV of the offer if the appropriate discount rate is 13 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV $ d-2. What is the NPV of the offer if the appropriate discount rate is 20 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV $

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jeff jeffy answered 2 years ago

Suppose you are offered $8,700 today but must make the following payments: Year Cash Flows 0...

Suppose you are offered $8,700 today but must make the following payments: Year Cash Flows 0 $ 8,700 1 −3,900 2 −2,900 3 −2,300 4 −1,800 a. What is the IRR of this offer? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If the appropriate discount rate is 10 percent, should you accept this offer? c. If the appropriate discount rate is 20 percent, should you accept...

Suppose you are offered a project with the following payments year cash flows 0 $10,600 1...

Suppose you are offered a project with the following payments year cash flows 0 $10,600 1 -4,900 2 -4,400 3 -3,400 4 -2,700 A/ what is the IRR of this offer? B/ If the appropriate discount rate is 14 percent, should you accept this offer? C/ If the appropriate discount rate is 24 percent, should you accept the offer? D-1/ What is the NPV of the offer if the appropriate discount rate is 14 percent? D-2? What is the NPV...

Suppose you will receive payments of $8,000, $2,000, and $8,000 in 1, 4, and 9 year(s)...

Suppose you will receive payments of $8,000, $2,000, and $8,000 in 1, 4, and 9 year(s) from now, respectively. What is the total present value of this stream of payments if the interest rate is 9%? Enter your response below rounded to 2 decimal places.

1. You are expecting to receive the following payments: $2,000 in year 4, $8,000 in year...

1. You are expecting to receive the following payments: $2,000 in year 4, $8,000 in year 8. What is the present value of the two payments today, if the interest rate is 5%? 2. Assume you wish to accumulate $100,000 in year 8. You plan to deposit $20,000 today in a bank that guarantees an interest rate of 12%. What additional amount will you have to put in year 5 to achieve this target? 3. You deposited $3,000 in a...

You are offered the chance to participate in a project that produces the following cash flows:...

You are offered the chance to participate in a project that produces the following cash flows: C0 C1 C2 + $ 5,900 + $ 4,450 − $ 12,800 The internal rate of return is 14.3%. a. If the opportunity cost of capital is 13%, what is the net present value of the project? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) b. Will you accept the offer?

You are offered an investment that will make three payments. The first payment of $5600 will...

You are offered an investment that will make three payments. The first payment of $5600 will occur four years from today. The second of $6700 will occur in five years, and the third of $7800 will follow in seven years. If you earn 11.1% what is the most this investment is worth today?

Suppose that a project generates the cash flows at the bottom, where payments are negative cash...

Suppose that a project generates the cash flows at the bottom, where payments are negative cash flows and revenues are positive cash flows. Assuming the cost of capital is 7.5% and using the net present value method, find the value of the project and give a recommendation on whether the project should be undertaken. Does your recommendation change if the costs of capital rises to 20%? Explain, and what is your recommendation? Now suppose that after the 12th period the...

Suppose you decide to purchase a used vehicle for $8,000. You are offered three loan options...

Suppose you decide to purchase a used vehicle for $8,000. You are offered three loan options to finance the vehicle: Loan A involves financing the $8,000 at 3.95% for 36 months, with payments of $236.01 per month. Loan B involves financing the $8,000 at 4.5% for 48 months, with payments of $182.43 per month. Loan C involves financing the $8,000 at 5% for 60 months, with payments of $150.97 per month. Discussion Questions: In paragraph form and complete sentences, answer...

Project A has the following cash flows: Year CF: -40,000, 8,000, 14,000, 13,000, 12,000, 11,000, and...

Project A has the following cash flows: Year CF: -40,000, 8,000, 14,000, 13,000, 12,000, 11,000, and 10,000. Project B has the following cash flows: Year CF: -20,000, 7,000, 13,000, and 12,000. Assuming that the required rate is 12%, what is the Equivalent Annual Annuity (EAA) for the two projects? Based on the EAA, which project is better?

A project has annual cash flows of $8,000 for the next 10 years and then $8,000...

A project has annual cash flows of $8,000 for the next 10 years and then $8,000 each year for the following 10 years. The IRR of this 20-year project is 8.32%. If the firm's WACC is 8%, what is the project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.

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