Question

In: Finance

Comparing all methods. Risky Business is looking at a project with the following estimated cash​ flow:...

Comparing all methods. Risky Business is looking at a project with the following estimated cash​ flow: Risky Business wants to know the payback​ period, NPV,​ IRR, MIRR, and PI of this project. The appropriate discount rate for the project is 12​%. If the cutoff period is 6 years for major​ projects, determine whether the management at Risky Business will accept or reject the project under the five different decision models.

What is the payback period for the new project at Risky​ Business?

What is the IRR?

What is the MIRR?

what is the PI?

Data Table:

Initial investment at start of​ project: $10,400,000

Cash flow at end of year​ one: $1,872,000

Cash flow at end of years two through​ six: ​$2,080,000 each year

Cash flow at end of years seven through​ nine: ​$2,246,400 each year

Cash flow at end of year​ ten: ​$1,728,000

Solutions

Expert Solution

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Comparing all methods. Risky Business is looking at a project with the following estimated cash​ flow:...
Comparing all methods. Risky Business is looking at a project with the following estimated cash​ flow: Initial investment at start of​ project: ​$12,300,000 Cash flow at end of year​ one: ​$2,214,000 Cash flow at end of years two through​ six: ​$2,460,000 each year Cash flow at end of years seven through​ nine: ​$2,878,200 each year Cash flow at end of year​ ten: ​$2,214,000 Risky Business wants to know the payback​ period, NPV,​ IRR, MIRR, and PI of this project. The...
Comparing all methods. Risky Business is looking at a project with the following estimated cash​ flow:...
Comparing all methods. Risky Business is looking at a project with the following estimated cash​ flow: Initial investment at start of​ project: ​$10,700,000 Cash flow at end of year​ one: ​$1,819,000 Cash flow at end of years two through​ six: ​$2,140,000 each year Cash flow at end of years seven through​ nine: ​$2,000,900 each year Cash flow at end of year​ ten: ​$1,539,154 Risky Business wants to know the payback​ period, NPV,​ IRR, MIRR, and PI of this project. The...
Comparing all methods. Risky Business is looking at a project with the estimated cash flow as?...
Comparing all methods. Risky Business is looking at a project with the estimated cash flow as? follows: Initial investment at start of? project:???$12 comma 600 comma 000 Cash flow at end of year? one:???$2 comma 268 comma 000 Cash flow at end of years two through? six:???$2 comma 520 comma 000 each year Cash flow at end of years seven through? nine:???$2 comma 948 comma 400 each year Cash flow at end of year? ten:???$2 comma 268 comma 000 Risky...
Risky Business is looking at a project with the following estimated cash​ flow: Initial investment at...
Risky Business is looking at a project with the following estimated cash​ flow: Initial investment at start of​ project: ​$10,000,000 Cash flow at end of year​ one: ​$1,700,000 Cash flow at end of years two through​ six: ​$2,000 each year Cash flow at end of years seven through​ nine: ​$2,040,000 each year Cash flow at end of year​ ten: ​$1,569,231 Risky Business wants to know the payback​ period, NPV,​ IRR, MIRR, and PI of this project. The appropriate discount rate...
Risky Business is looking at a project with the estimated cash flow as​ follows: Initial investment...
Risky Business is looking at a project with the estimated cash flow as​ follows: Initial investment at start of​ project:$12,200,000 Cash flow at end of year​ one: $2,196,000 Cash flow at end of years two through​ six:$2,440,000 each year Cash flow at end of years seven through​ nine:$2,635,200 each year Cash flow at end of year​ ten: $2,027,077 Risky Business wants to know the payback​ period, NPV,​ IRR, and PI of this project. The appropriate discount rate for the project...
•You are looking at a new project and you have estimated the following cash flows: Year...
•You are looking at a new project and you have estimated the following cash flows: Year 0: CF = -$150,000 Year 1-2: CF = $80,000 Year 3-4: CF = $50,000 Year 5-6: CF = $30,000 Year 7: CF = -$180,000 Your cost of capital is 10% Please calculate NPV and IRR, and decide whether we should take this project?
1)you've estimated the following cash flows (in$) for a project A. B year. cash flow 0...
1)you've estimated the following cash flows (in$) for a project A. B year. cash flow 0 -5,300 1 1,325 2 2,148 3 2,209 what is the IRE for the project 2)you've estimated the following cash flows (in$) for 2 projects: A. B. C.    year. ProjectA. ProjectB 0. -78 -261 1 15 50 2 21 73 3 29 82 4 35 127 the required return is 7% for both projects What is the IRR for project B? What is the...
Operating cash flow​ (growing each​ year; MACRS). Miglietti Restaurants is looking at a project with the...
Operating cash flow​ (growing each​ year; MACRS). Miglietti Restaurants is looking at a project with the following forecasted​ sales: ​ first-year sales quantity of 31,000​ with an annual growth rate of 4.00​% over the next ten years. The sales price per unit will start at $42 and will grow at 2.50​% per year. The production costs are expected to be 55​% of the current​ year's sales price. The manufacturing equipment to aid this project will have a total cost​ (including...
You are considering a project with the following cash​ flows: YEAR                      PROJECT CASH FLOW    ...
You are considering a project with the following cash​ flows: YEAR                      PROJECT CASH FLOW     0                         -60,000     1                         25,000     2                         25,000     3                         25,000     4                         25,000 If the appropriate discount rate is 11 ​percent, what is the​ project's discounted payback​ period in years?
What are the best methods to use for cash flow analysis in your business or personal...
What are the best methods to use for cash flow analysis in your business or personal life?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT