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In: Finance
TL Lumber is evaluating a project with cash flows of −$12,800, $7,400, $11,600, and −$3,200 for...
TL Lumber is evaluating a project with cash flows of −$12,800, $7,400, $11,600, and −$3,200 for Years 0 to 3, respectively. Given an interest rate of 8 percent, what is the MIRR using the discounted approach? 13.25 percent 14.08 percent 15.40 percent 14.36 percent 19.23 percent
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Solo Corp. is evaluating a project with the following cash flows: Year Cash Flow 0 –$12,800...
Solo Corp. is evaluating a project with the following cash
flows: Year Cash Flow 0 –$12,800 1 5,600 2 6,600 3 6,300 4 5,200 5
–4,600 The company uses a disount rate of 11 percent and a
reinvestment rate of 9 percent on all of its projects. Calculate
the MIRR of the project using all three methods using these
interest rates. a. MIRR using the discounting approach.
Vail Recreation is analyzing a project that will generate cash flows of $10,650, $11,600, $14,700, and...
Vail Recreation is analyzing a project that will generate cash
flows of $10,650, $11,600, $14,700, and $9,200 over each of the
next four years, respectively. The profitability index (PI) is the
way they analyze their investment projects. The appropriate
required return for a project like this is 9 percent. This project
has a PI of 1.347. Based on this information provided, determine
the Time 0 cost for this project.
An investment project costs $16,700 and has annual cash flows of $3,200 for six years. a....
An investment project costs $16,700 and has annual cash flows of
$3,200 for six years.
a. What is the discounted payback period if the discount rate is
zero percent?
b. What is the discounted payback period if the discount rate is
3 percent?
c. What is the discounted payback period if the discount rate is
22 percent?
Solo Corp. is evaluating a project with the following cash flows:
Solo Corp. is evaluating a project with the following cash
flows:
Year
Cash Flow
0
–$
28,500
1
10,700
2
13,400
3
15,300
4
12,400
5
–
8,900
The company uses a discount rate of 11 percent and a
reinvestment rate of 8 percent on all of its projects.
Calculate the MIRR of the project using the discounting
approach. (Do not round intermediate calculations. Enter
your answer as a percent rounded to 2 decimal places, e.g.,
32.16.)
Calculate the MIRR...
Solo Corp. is evaluating a project with the following cash flows:
Solo Corp. is evaluating a project with the following cash
flows:
Year
Cash Flow
0
–$
28,500
1
10,700
2
13,400
3
15,300
4
12,400
5
–
8,900
The company uses a discount rate of 11 percent and a
reinvestment rate of 8 percent on all of its projects.
Calculate the MIRR of the project using the discounting
approach. (Do not round intermediate calculations. Enter
your answer as a percent rounded to 2 decimal places, e.g.,
32.16.)
Calculate the MIRR...
Waste Industries is evaluating a $55,500 project with the following cash flows. Years Cash Flows 1...
Waste Industries is evaluating a $55,500 project with the
following cash flows.
Years Cash Flows
1 $ 9,120
2 20,200
3 26,600
4 16,300
5 26,300
The coefficient of variation for the project is 0.475.
Coefficient of Variation
Discount Rate
0
−
0.25
7
%
0.26
−
0.50
9
%
0.51
−
0.75
13
%
0.76
−
1.00
16
%
1.01
−
1.25
19
%
Use Appendix B for an approximate answer but calculate your
final answer using the formula...
Waste Industries is evaluating a $56,900 project with the following cash flows. Years Cash Flows 1...
Waste Industries is evaluating a $56,900 project with the
following cash flows.
Years
Cash Flows
1
$
9,710
2
19,200
3
26,500
4
19,800
5
27,300
The coefficient of variation for the project is 0.443.
Coefficient of Variation
Discount Rate
0
−
0.25
7
%
0.26
−
0.50
9
%
0.51
−
0.75
13
%
0.76
−
1.00
16
%
1.01
−
1.25
19
%
Use Appendix B for an approximate answer but calculate your
final answer using the formula...
Apple Inc. is evaluating Project Vanguard with the following cash flows:
Apple Inc. is evaluating Project Vanguard with the following cash flows:
Year
0
1
2
3
4
Cash Flow ($m)
-80
10
20
35
40
(i) Use the payback rule to determine whether the company should accept the project or not if its payback period cutoff is 4 years.
(ii) Use the IRR rule to determine whether the company should accept the project or not if its cost of capital is 10%.
(iii) Use the NPV rule to determine whether...
Anderson International Limited is evaluating a project in Erewhon. The project will create cash flows as...
Anderson International Limited is evaluating a project in
Erewhon. The project will create cash flows as listed in the table
below. All cash flows will occur in Erewhon and are expressed in
dollars. In an attempt to improve its economy, the Erewhonian
government has declared that all cash flows created by a foreign
company are “blocked” and must be reinvested with the government
for one year. The reinvestment rate for these funds is 10%. The
required return is 15%. What...
Project Cash Flows You are evaluating a project for The Ultimate recreational tennis racket, guaranteed to...
Project Cash Flows You are evaluating a project for The Ultimate
recreational tennis racket, guaranteed to correct that wimpy
backhand. You estimate the sales price of The Ultimate to be $400
per unit and sales volume to be 1,000 units in year 1; 1,250 units
in year 2; and 1,325 units in year 3. The project has a three-year
life. Variable costs amount to $225 per unit and fixed costs are
$100,000 per year. The project requires an initial investment...
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