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In: Finance
Project A has an initial cost of $211,400 and projected cash flows of $46,200, $64,900, and...
Project A has an initial cost of $211,400 and projected cash flows of $46,200, $64,900, and $135,800 for Years 1 to 3, respectively. Project B has an initial cost of $187,900 and projected cash flows of $43,200, $59,700, and $125,600 for Years 1 to 3, respectively. What is the incremental IRRA–B of these two mutually exclusive projects?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Project Q has an initial cost of $257,412 and projected cash flows of $123,300 in Year...
Project Q has an initial cost of $257,412 and projected cash
flows of $123,300 in Year 1 and $180,300 in Year 2. Project R has
an initial cost of $349,000 and projected cash flows of $184,500 in
Year 1 and $230,600 in Year 2. The discount rate is 12.2 percent
and the projects are mutually exclusive. Which project(s), if any,
should be accepted based on the net present value rule?
A.
Accept both Projects.
B.
Accept Project R and reject...
Lepton Industries has a project with the following projected cash flows: Initial Cost, Year 0: $468,000...
Lepton Industries has a project with the following projected
cash flows: Initial Cost, Year 0: $468,000 Cash flow year one:
$135,000 Cash flow year two: $240,000 Cash flow year three:
$185,000 Cash flow year four: $135,000 Plot the NPV profile of this
project in Excel. Start with discount rate equal to zero and
increase the discount rate by 2% increments until discount rate
equal to 30%. For what discount rates would Lepton accept this
project? For what discount rates would...
Net present value. Quark Industries has a project with the following projected cash flows: Initial cost:...
Net present value. Quark Industries has a project with the
following projected cash flows: Initial cost: $210,000 Cash flow
year one: $25,000 Cash flow year two: $72,000 Cash flow year
three: $146,000 Cash flow year four: $146,000 a. Using a
discount rate of 11% for this project and the NPV model,
determine whether the company should accept or reject this project.
b. Should the company accept or reject it using a discount rate of
13%? c. Should the company accept...
Net present value. Quark Industries has a project with the following projected cash flows: Initial cost:...
Net present value. Quark Industries has a
project with the following projected cash flows:
Initial cost: $270,000
Cash flow year one: $24,000
Cash flow year two: $79,000
Cash flow year three: $155,000
Cash flow year four: $155,000
a. Using a discount rate of 10% for this
project and the NPV model, determine whether the company should
accept or reject this project.
b. Should the company accept or reject it using
a discount rate of 13%?
c. Should the company accept...
Net present value. Lepton Industries has a project with the following projected cash flows: Initial cost:...
Net present value. Lepton Industries has a
project with the following projected cash flows:
Initial cost: $460,000
Cash flow year one: $132,000
Cash flow year two: $200,000
Cash flow year three: $191,000
Cash flow year four: $132,000
a. Using a discount rate of 11% for this
project and the NPV model, determine whether the company should
accept or reject this project.
b. Should the company accept or reject it using
a discount rate of 13%?
c. Should the company accept...
Hendrix Guitar is considering the following Project. The Projected cash flows are below: Initial Cost is...
Hendrix Guitar is considering the following Project. The Projected
cash flows are below: Initial Cost is $ 2.1 million; annual net
cash flows are $750, 000 per year for 5 years. what is the
discounted Payback Period if the appropriate discount rate is
7.5%?
Corporation has a project with the initial cost of $150. It will generate the cash flows...
Corporation has a project with the initial cost of $150. It will
generate the cash flows of $50, $100, and $150 in years 1, 2 and 3,
respectively, which is the internal rate of return (IRR) of
project?
A project requires an initial cost of $225,000; has a present value of operating cash flows...
A project requires an initial cost of $225,000; has a present
value of operating cash flows over its ten-year life of $310,000;
and has a book value at the end of 10 years of $120,000. Current
assets of $20,000, and current liabilities of $4,000 will be needed
for the project to begin. Calculate the terminal value and NPV
using its book value after 10 years, assuming a 15 percent discount
rate.
a project with an initial cost of $73,600 is expected to generate annual cash flows of...
a project with an initial cost of $73,600 is expected to
generate annual cash flows of $16,360 for the next 8 years. what is
the projects internal rate of retu
A project with an initial cost of $30,700 is expected to provide cash flows of $10,950,...
A project with an initial cost of $30,700 is expected to provide
cash flows of $10,950, $11,800, $14,900, and $9,400 over the next
four years, respectively. If the required return is 9.2 percent,
what is the project's profitability index?
1.392
1.031
1.134
1.237
.808
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