Question
In: Finance
Calculate NPV for each project. Please workout problem.. Discount rate 10% Year Project A Project B...
Calculate NPV for each project. Please workout problem..
|
Discount rate |
10% |
|||
|
Year |
Project A |
Project B |
Project C |
|
|
2018 |
($3,000,000) |
($3,000,000) |
($3,200,000) |
|
|
2019 |
$0 |
$975,000 |
$985,000.00 |
|
|
2020 |
$600,000 |
$975,000 |
$925,000.00 |
|
|
2021 |
$900,000 |
$975,000 |
$1,000,000.00 |
|
|
2022 |
$3,000,000 |
$1,000,000 |
$950,000.00 |
|
Solutions
Expert Solution
Project - A
|
Year |
Cash Flow |
Present Value Factor |
Present Value of cash flow |
|
1 |
0 |
0.90909 |
0 |
|
2 |
600,000.00 |
0.826446 |
495,867.77 |
|
3 |
900,000.00 |
0.751314 |
676,183.32 |
|
4 |
3,000,000.00 |
0.683013 |
2,049,040.37 |
|
Total Present Value of cash flows |
3,221,091.46 |
||
Net Present Value = Present Value of cash flows – Initial Investment
= $3,221,091.46 – 30,00,000
= $221,091.46
Project - B
|
Year |
Cash Flow |
Present Value Factor |
Present Value of cash flow |
|
1 |
975,000.00 |
0.90909 |
886,363.64 |
|
2 |
975,000.00 |
0.826446 |
805,785.12 |
|
3 |
975,000.00 |
0.751314 |
732,531.93 |
|
4 |
1,000,000.00 |
0.683013 |
683,013.46 |
|
Total Present Value of cash flows |
3,107,694.15 |
||
Net Present Value = Present Value of cash flows – Initial Investment
= $3,107,694.15 – 30,00,000
= $107,694.15
Project - C
|
Year |
Cash Flow |
Present Value Factor |
Present Value of cash flow |
|
1 |
985,000.00 |
0.90909 |
895,454.55 |
|
2 |
925,000.00 |
0.826446 |
764,462.81 |
|
3 |
1,000,000.00 |
0.751314 |
751,314.8 |
|
4 |
950,000.00 |
0.683013 |
648,862.78 |
|
Total Present Value of cash flows |
3,060,094.94 |
||
Net Present Value = Present Value of cash flows – Initial Investment
= $3,060,094.94 – 32,00,000
= -$139,905.06 [Negative NPV]
jeff jeffy answered 1 year agoRelated Solutions
What is the NPV of the following project if the discount rate is 10%? Round to...
What is the NPV of the following project if the discount rate is
10%? Round to the nearest cent. Investment today: $-150,000; Cash
flow in year 1: $60,000; Cash flow in year 2: $75,000; Cash flow in
year 3: $60,000
Note the payback period for each project. Calculate the NPV for each project assuming discount rates of 10%, 12% and 14% (round your answers to whole dollars).
Project Number 1
2 3 4 5
6 7 8
Initial Investment
($2,000) ($2,000) ($2,000)
($2,000) ($2,000) ($2,000)
($2,000) ($2,000)
Year 1 $330 $1,666
$160 280
$2,200 $1,200 ($350)
2 330 334
200 280
900 (60)
3 330 165
350 280
300 60
4 330
395 280
90 350
5 330
432 280
70 700
6 330
440 280
1,200
7 330
442 280
2,250
8 1,000
444 280
9
446 280
10
448 280
11
450 280
12
451 ...
A project has an NPV of £12,632 when a discount rate of 12% is used and...
A project has an NPV of £12,632 when a discount rate
of 12% is used and the same project has an NPV of (£6,935) when a
discount rate of 24% is used. The approximate internal rate of
return of the project is:
Select one:
a. 18.5%
b. 15.16%
c. 20.5%
d. 19.75%
An investment project costs $10,500 and will generate $4,000 in
annual cash flows for five years. What is the exact internal rate
of return (IRR)?
Select one:
a....
Calculate the NPV for each project and determine which project should be accepted. Project A Project...
Calculate the NPV for each project and determine which project
should be accepted.
Project A
Project B
Project C
Project D
Inital Outlay
(105,000.000)
(99,000.00)
(110,000.00)
(85,000.00)
Inflow year 1
53,000.00
51,000.00
25,000.00
45,000.00
Inflow year 2
50,000.00
47,000.00
55,000.00
50,000.00
Inflow year 3
48,000.00
41,000.00
15,000.00
30,000.00
Inflow year 4
30,000.00
52,000.00
21,000.00
62,000.00
Inflow year 5
35,000.00
40,000.00
35,000.00
68,000.00
Rate
7%
10%
13%
18%
Your company is considering three independent projects. Given
the following cash flow information,...
Calculate the NPV for each project and determine which project should be accepted. Project A Project...
Calculate the NPV for each project and determine which project
should be accepted. Project A Project B Project C Project D Initial
Outlay (105,000.00) (99,000.00) (110,000.00) (85,000.00) Inflow
year 1 53,000.00 51,000.00 25,000.00 45,000.00 Inflow year 2
50,000.00 47,000.00 55,000.00 50,000.00 Inflow year 3 48,000.00
41,000.00 15,000.00 30,000.00 Inflow year 4 30,000.00 52,000.00
21,000.00 62,000.00 Inflow year 5 35,000.00 40,000.00 35,000.00
68,000.00 Rate 7% 10% 13% 18% NPV = $75,228.32 $77,364.07
-$2,531.00 $69,006.08 Answer: Project B How to show work...
Calculate the project's MIRR, given a discount rate of 9 percent. The MIRR of the project with a discount rate of 9% is...
Emily's Soccer Mania is considering building a new plant. This
project would require an initial cash outlay of $8.5 million and
would generate annual cash inflows of $3.5 million per year for
years one through four. In year five the project will require an
investment outlay of $5.5 million. During years 6 through 10 the
project will provide cash inflows of $5.5 million per year.Question:Calculate the project's MIRR, given a discount rate of 9
percent. The MIRR of the project...
Calculate the NPV for the following investment with 6 years life time assuming a discount rate...
Calculate the NPV for the following investment with 6 years life
time assuming a discount rate of 20% per year:
The investor is a Non-integrated petroleum company
Total producible oil in the reserve is estimated to be 2,400,000
barrels
Production rate will be 400,000 barrels of oil per year from
year 1 to year 6
Mineral rights acquisition cost for the property will be
$1,600,000 at time zero
Intangible drilling cost (IDC) is expected to be $7,000,000 at
time zero...
If the discount rate changes from 12% to 15%, what is the CHANGE in the NPV of the project approximately?
A project has the following cash flows:
Year 0
Year 1
Year 2
Year 3
Cash flow
-100.000
70.000
120.000
200.00
If the discount rate changes from 12% to 15%, what is the CHANGE
in the NPV of the project approximately?
Please no excel sheet, just detailed steps for someone new in
finance ;)
Use a 5 percent discount rate to compute the NPV of each of the following series...
Use a 5 percent discount rate to compute the NPV of each of the
following series of cash receipts and payments: Use Appendix A and
Appendix B. $6,200 received now (year 0), $1,890 paid in year 3,
and $4,000 paid in year 5. $10,000 paid now (year 0), $12,690 paid
in year 2, and $31,000 received in year 8. $20,000 received now
(year 0), $13,500 paid in year 5, and $7,500 paid in year 10. (For
all requirements, round discount...
Use a 5 percent discount rate to compute the NPV of each of the following series...
Use a 5 percent discount rate to compute the NPV of each of the
following series of cash receipts and payments: Use Appendix A and
Appendix B. $6,200 received now (year 0), $1,890 paid in year 3,
and $4,000 paid in year 5. $10,000 paid now (year 0), $12,690 paid
in year 2, and $31,000 received in year 8. $20,000 received now
(year 0), $13,500 paid in year 5, and $7,500 paid in year 10. (For
all requirements, round discount...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- In your response, be sure to address all parts of the question. Use complete sentences; an...
- c. Discuss a work situation in which you, a manager, or other employee had inadequate communications...
- How Wall Street Works in NY?? & about the biggest day after NY bombed Iraq in...
- How does poverty contribute the physical, and mental health of individuals?
- How well can we evaluate a regression equation “fits” the data by examining the R Square...
- Q # 1: Define and describe the following terms: 1) psychedelic drugs, hallucinogens, lysergic acid diethylamide,...
- Can someone who's read the worth expert guide to scientific literacy: thinking like a psychological scientist...
ADVERTISEMENT