A five-year project requires an investment of -255 and has the following cash flows in years...

A five-year project requires an investment of -255 and has the following cash flows in years 1 through 5, respectively (all cash flows in dollars): 159, 83, 243, 125, and 172. Without actually calculating any IRR, what is the maximum possible value any of the real IRRs could have? Give your answer as a percent with two decimals; e.g., 23.24

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jeff jeffy answered 2 years ago

A five-year project requires an investment of -172 and has the following cash flows in years...

A five-year project requires an investment of -172 and has the following cash flows in years 1 through 5, respectively (all cash flows in dollars): 135, -95, 238, -75, and 118. Without actually calculating any IRR, what is the maximum possible value any of the real IRRs could have? Give your answer as a percent with two decimals; e.g., 23.24

A five-year project requires an investment of -177 and has the following cash flows in years...

A five-year project requires an investment of -177 and has the following cash flows in years 1 through 5, respectively (all cash flows in dollars): 116, -109, 267, 2, and 108. Without actually calculating any IRR, what is the maximum possible value any of the real IRRs could have? Give your answer as a percent with two decimals; e.g., 23.24 The answer is 150.85. I would like to understand why. Thanks!

What is the payback period for the investment project that has the following cash flows? Year...

What is the payback period for the investment project that has the following cash flows? Year Cash Flows 0 -65,209 1 24,853 2 27,977 3 23,774 4 25,436

A project requires a $2,000 investment. The net cash flows are $350 per year for 10...

A project requires a $2,000 investment. The net cash flows are $350 per year for 10 years. The opportunity cost of capital (RA) is 12%. The company intends to finance the project with $1,000 of interest-bearing debt and $1,000 of equity. The interest rate is 8%. The corporate tax rate is equal to 30%. The company must repay the principal in equal annual installments over 5 years. a. Calculate the adjusted net present value (APV). b. Starting with your answer...

Project A has the following Cash Flows: Cost = $1,200,000; Cash flows the following years as...

Project A has the following Cash Flows: Cost = $1,200,000; Cash flows the following years as follows: Year 1 = $274,600; Year 2 = $298,000; Year 3 = $303,950; Year 4 = $312,875; and Year 5 = $374,600. Calculate the Traditional Payback. Assume cash flows are even throughout the year. Calculate the Net Present Value using the WACC = 8.28%.

Huggins Co. has identified an investment project with the following cash flows. Year Cash Flow...

Huggins Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $ 900 2 1,290 3 1,550 4 1,725 If the discount rate is 7 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $ What is the present value at 20 percent? (Do not round intermediate calculations and round your answer to 2 decimal places,...

Wilkinson Co. has identified an investment project with the following cash flows: Year Cash Flow...

Wilkinson Co. has identified an investment project with the following cash flows: Year Cash Flow 1 $ 760 2 1,010 3 1,270 4 1,375 If the discount rate is 11 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) If the discount rate is 18 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round...

A project requires an investment of $330 million and has expected annual cash flows of $27...

A project requires an investment of $330 million and has expected annual cash flows of $27 million in perpetuity, starting in one year. In fact, future cash flows will be either $78 million or $16 million, in perpetuity. The company can end the project in 1 year after collecting the first cash flow and thus finding out the amount of future cash flows, and then sell all project assets for $330 million (after taxes). The appropriate discount rate for the...

A project requires an investment of $110 million and has expected annual cash flows of $17...

A project requires an investment of $110 million and has expected annual cash flows of $17 million in perpetuity, starting in one year. The appropriate discount rate for the project is 14%. The company can delay the project by 1 year. After 1 year, the company can invest $110 million to start the project and will know whether demand will be high or low. With high demand, future cash flows will be $22 million in perpetuity, starting in year 2,...

Project A requires an original investment of $62,000. The project will yield cash flows of $18,600...

Project A requires an original investment of $62,000. The project will yield cash flows of $18,600 per year for 4 years. Project B has a computed net present value of $3,690 over a 4-year life. Project A could be sold at the end of 4 years for a price of $14,900. Following is a table for the present value of $1 at compound interest: Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712...

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