Question
In: Finance
ompany B’s WACC is 10%. It has three Projects it can choose from: Projects X, Y...
ompany B’s WACC is 10%. It has three Projects it can choose
from: Projects X, Y and Z. The following information is available
regarding Project X.
Years 0 1 2 3
Project X cash flows -$100 80 60 40
And the following information is available regarding Projects Y and
Z.
Criteria Project Y Project Z
NPV $40 $67
MIRR 10% 20%
IRR 2.0% 18.7%
Regular Payback 2.23 years 1.77 years
9) If IRR for Project X is 17.95%, and the three project X, Y & Z are independent, then based on IRR criteria we choose: *
10) Assuming the three projects X, Y & Z are mutually exclusive, based on regular payback period criteria we choose: *
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Company B’s WACC is 10%. It has three Projects it can choose from: Projects X, Y...
Company B’s WACC is 10%. It has three Projects it can choose
from: Projects X, Y and Z. The following information is available
regarding Project X.
Years 0 1 2 3
Project X cash flows -$100 80 60 40
And the following information is available regarding Projects Y and
Z.
Criteria Project Y Project Z
NPV $40 $67
MIRR 10% 20%
IRR 2.0% 18.7%
Regular Payback 2.23 years 1.77 years
5) Assuming the three projects X, Y & Z are...
Company B has three Projects it can choose from: Projects X, Y and Z. The following...
Company B has three Projects it can choose from: Projects X, Y
and Z. The following information is available regarding Project
X:
Years 0 1 2 3
CF -100 80 60 40
The company’s capital structure is distributed equally between debt
and preferred stock and the remaining 40% goes to common stock. It
has also the following information:
1- After tax cost of debt: 3%. Tax rate: 40%
2- Preferred stocks are selling at $70 per share and pay a...
Company B has three Projects it can choose from: Projects X, Y and Z. The following...
Company B has three Projects it can choose from: Projects X, Y
and Z. The following information is available regarding Project X:
Years 0 1 2 3 CF -100 80 60 40
The company’s capital structure is distributed equally between
debt and preferred stock and the remaining 40% goes to common
stock. It has also the following information: 1- After tax cost of
debt: 3%. Tax rate: 40% 2- Preferred stocks are selling at $70 per
share and pay a...
Company B has three Projects it can choose from: Projects X, Y and Z. The following...
Company B has three Projects it can choose from: Projects X, Y
and Z. The following information is available regarding Project
X:
Years 0 1 2 3
CF -100 80 60 40
The company’s capital structure is distributed equally between debt
and preferred stock and the remaining 40% goes to common stock. It
has also the following information:
1- After tax cost of debt: 3%. Tax rate: 40%
2- Preferred stocks are selling at $70 per share and pay a...
Consider the following projects, X and Y where the firm can only choose one.
3Consider the following projects, X and Y where the firm can only choose one. Project X costs $600 and has cash flows of $400 in each of the next 2 years. Project also costs $600 and generates cash flows of $500 for the next 2 years respectively. Which investment should the firm choose the cost of capital is 25 percent? Another since both the projects have negative NPV Another, since both the projects have positive NPV Project X sine X has a higher...
Consider the following projects X and Y where the firm can choose only once. Project X...
Consider the following projects X and Y where the firm can choose
only once. Project X costs $600
and has cash flows of $400 in each of the next two years. Project B
also costs $ 600 and generates
cash flows $500 and $275 for the next two years, respectively.
Sketch a net present value profile
(graphs) for each of these projects. For graphs you may use
approximation
Which project should the firm choose if the cost of capital is...
Consider the following projects, X and Y where the firm can only choose one. Project X...
Consider the following projects, X and Y where the firm can only
choose one. Project X costs $1500 and has cash flows of $678, $652,
$347, $111, $54, $16 in each of the next 6 years. Project Y also
costs $1500, and generates cash flows of $738, $693, $405 for the
next 3 years, respectively. WACC=9.5%.
A) Draw the timelines for both projects: X and Y.
B) Calculate the projects’ NPVs, IRRs, payback periods.
C) If the two projects are...
"Answer all the parts in one answer" Company B has three Projects it can choose from:...
"Answer all the parts in one answer"
Company B has three Projects it can choose from:
Projects X, Y and Z. The following information is available
regarding Project X:
Years 0 1 2 3
CF -100 80 60 40
The company’s capital structure is distributed equally
between debt and preferred stock and the remaining 40% goes to
common stock. It has also the following information:
1- After tax cost of debt: 3%. Tax rate: 40%
2- Preferred stocks are selling...
Takelmer Industries has a different WACC for each of three types of projects. Lowminusrisk projects have...
Takelmer Industries has a different WACC for each of three types
of projects. Lowminusrisk projects have a WACC of 8.00%,
averageminusrisk projects a WACC of 10.00%, and highminusrisk
projects a WACC of 12%. Which of the following projects do you
recommend the firm accept? Project Level of Risk IRR A Low 9.50%
B Average 8.50% C Average 7.50% D Low 9.50% E High 14.50% F
High 17.50% G Average 11.50%
A. E, F, G
B. B, C, E, F, G...
You must analyze two projects, X and Y. Each project costs $10,000, and the firm’s WACC...
You must analyze two projects, X and Y. Each project
costs $10,000, and the firm’s WACC is 12%. The expected net cash
flows are as follows:
Project X Project Y
0 -$10,000 -$10,000
1 $6,500 $3,500
2 $3,000 $3,500
3 $3,000 $3,500
4 $1,000 $3,500
a. Calculate each project’s NPV, IRR, MIRR, payback, and discounted
payback.
b. Which project(s) should be accepted if they are
independent?
c. Which project(s) should be accepted if they are mutually
exclusive?
Hint: (Project-X IRR...
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