Question
In: Finance
TABLE 4 Project Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Cash...
|
TABLE 4 |
||||||
|
Project |
Year 0 |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|
Cash Flow |
Cash Flow |
Cash Flow |
Cash Flow |
Cash Flow |
Cash Flow |
|
|
A |
-15000 |
6000 |
7000 |
6000 |
6000 |
6000 |
|
B |
-15000 |
7000 |
7000 |
7000 |
7000 |
7000 |
|
C |
-18000 |
12000 |
2000 |
2000 |
2000 |
2000 |
-
"Consider the cash flow of the three projects depicted in Table 4. The cost of capital is 7.5%. If an investor decided to take projects with a payback period of 2 years or less, which of these projects would he take?"
A) Investment A
B) Investment B
C) Investment C
D) none of these investments
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Determine the rate of return for this project. Year 0 1 2 3 4 5 Cash...
Determine the rate of return for this project.
Year
0
1
2
3
4
5
Cash flow
-$12,300
$4000
$4000
$3000
$3000
$3000
14.21%
12.75%
13.11%
13.85%
Consider cash flows for projects A and B Year: 0, 1, 2, 3, 4, 5 Project...
Consider cash flows for projects A and B
Year: 0, 1, 2, 3, 4, 5
Project A: -$1000, 375, 375, 375, 375,-100
Project B: -$1000, 900, 700, 500, -200, 200
The cost of capital for both projects is 10%
1. Find the NPV and MIRR of projects A and B. If project A and B
are mutually exclusive.
2. Find the crossover rate for projects A and B.
3. What is the profitability index for projects A and B? How...
Consider the cash flow for projects A and B Year: 0, 1, 2, 3, 4, 5...
Consider the cash flow for projects A and B
Year: 0, 1, 2, 3, 4, 5
Project A: ($1000), 100, 600, 700, 900, 300
Project B: ($1000), 900, 700, 500, 300, 300
The cost of capital for both projects is 10%
1. Find NPV, IRR and profitability index (PI) of projects A and
B.
2. If projects A and B are mutually exclusive, which project
would you select
3. Find the crossover rate for projects A and B
Consider the cash flow for projects A and B Year: 0, 1, 2, 3, 4, 5
Consider the cash flow for projects A and B Year: 0, 1, 2, 3, 4, 5
Project A: ($1000), 100, 600, 700, 900, 300
Project B: ($1000), 900, 700, 500, 300, 300
The cost of capital for both projects is 10%
1. Find NPV, IRR and profitability index (PI) of projects A and B.
2. If projects A and B are mutually exclusive, which project would you select
3. Find the crossover rate for projects A and B
You have 3 projects with the following cash flows: Year 0 1 2 3 4 Project...
You have 3 projects with the following cash flows:
Year
0
1
2
3
4
Project 1
-$ 152
$22
$39
$58
$82
Project 2
−826
0
0
7,010
−6,506
Project 3
21
41
61
80
−247
a. For which of these projects is the IRR rule reliable?
b. Estimate the IRR for each project (to the nearest1%).
c. What is the NPV of each project if the cost of capital is
5%?20 %50%?
a. For which of these...
You have 3 projects with the following cash flows: Year 0 1 2 3 4 Project...
You have 3 projects with the following cash flows:
Year
0
1
2
3
4
Project 1
−$151
$ 21
$ 39
$ 59
$ 80
Project 2
−824
00
00
6,999
−6,501
Project 3
2020
40
62
81
−245
a. For which of these projects is the IRR rule reliable?
b. Estimate the IRR for each project (to the nearest
1%).
c. What is the NPV of each project if the cost of capital is
5%?
20%?
50%?
a....
Considering the following projects. Project Year 0 1 2 3 4 A Cash flows -$100...
Considering the following projects.
Project
Year
0
1
2
3
4
A
Cash flows
-$100
$35
$35
$35
$35
B
Cash flows
-$100
$60
$50
$40
$30
If project B is risker than project A,
in which project A has WACC =
6.00% while project B has WACC = 8.50%.
If these two projects are mutually exclusive, which project
should the company accept?
Compute:
NPV, IRR, MIRR,
payback, and discounted payback
period for each project.
# please with details.
Use these cash flows to answer the following questions: Year 0 1 2 3 4 5...
Use these cash flows to answer the following questions:
Year 0 1 2 3 4 5 6
A (4,000) 800 1,400 1,300 1,200 1,100 1,000
B (2,000) 700 1,300 1,200 0 0 0
a. Calculate the NPV for projects A and B using
a 20 percent discount rate (write the calculate keys that
you use to get the answer).
b Calculate the Equivalent Annual Annuity (EAA)
for projects A and B using a 20 percent discount rate
(write the calculate...
These are the cash flows. Year 0 1 2 3 4 5 6 Revenue 3.2000 4.0000...
These are the cash flows.
Year
0
1
2
3
4
5
6
Revenue
3.2000
4.0000
5.6000
5.6000
4.0000
2.4000
Expenses
.7200
.9000
1.2600
1.2600
.9000
.5400
Depreciation
.9500
.9500
.9500
.9500
.9500
.9500
Pretax profit
1.5300
2.1500
3.3900
3.3900
2.1500
.9100
Tax
.5355
.7525
1.1865
1.1865
.7525
.3185
Net income
.9945
1.3975
2.2035
2.2035
1.3975
.5915
OCF
1.9445
2.3475
3.1535
3.1535
2.3475
1.5415
Cash flow investment
−5.7000
.4362
Change in NWC
−.3200
−.0800
−.1600
0.0000
.1600
.1600
.2400...
Consider the following cash flows: Year 0 1 2 3 4 5 6 Cash Flow -$10,000...
Consider the following cash flows:
Year 0 1 2 3 4 5 6
Cash Flow -$10,000 $2,200 $3,300 $2,500 $2,500 $2,300 $2,100
A. Payback The company requires all projects to payback within 3
years. Calculate the payback period. Should it be accepted or
rejected?
B. Discounted Payback Calculate the discounted payback using a
discount rate of 10%. Should it be accepted or rejected?
C. IRR Calculate the IRR for this project. Should it be accepted
or rejected?
D. NPV Calculate...
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