Question

In: Finance

King Fisher Aviation is evaluating an investment project with the following case flows: $6,000 $5,500 $7,000...

King Fisher Aviation is evaluating an investment project with the following case flows:

$6,000

$5,500

$7,000

$8,000

Discount rate 14 percent

What are your recommendations on the investment project? Explain your reasoning.

Solutions

Expert Solution

Statement showing Cash flows
Particulars Time PVf 14% Amount PV
Cash inflows                         1.00                    0.8772                6,000.00                5,263.16
Cash inflows                         2.00                    0.7695                5,500.00                4,232.07
Cash inflows                         3.00                    0.6750                7,000.00                4,724.80
Cash inflows                         4.00                    0.5921                8,000.00                4,736.64
PV of Cash Inflows =PVCI              18,956.67
If the investment in project is less than 18,956 then the project should be accepted otherwise rejected since PVCI is 18,956.67

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

King Fisher Aviation is evaluating an investment project with the following case flows: year 1 $6,000:...
King Fisher Aviation is evaluating an investment project with the following case flows: year 1 $6,000: year 2 $5,500: year3 $7,000: year 4 $8,000 Discount rate 14 percent What is the discounted payback period for these cash flows if the initial cost is 15,000? What if the initial cost is $12,000? What if the cost is $16,000? I need all 4 years with the discount rate at 14% and with the different initial costs. Annual cash inflows: Year 1 $         ...
King Fisher Aviation is considering an investment in a new technology for a drone project with...
King Fisher Aviation is considering an investment in a new technology for a drone project with a price of $16 million. Their current technology has a book value of $5 million and a market value of $5 million. The new technology is expected to have a five (5) year life, and the old technology has three (3) years left in which it can be expected to be used. If the firm replaces the old technology with the new technology it...
King Fisher Aviation is considering an investment in a new technology for a drone project with...
King Fisher Aviation is considering an investment in a new technology for a drone project with a price of $16 million. Their current technology has a book value of $5 million and a market value of $5 million. The new technology is expected to have a five (5) year life, and the old technology has three (3) years left in which it can be expected to be used. If the firm replaces the old technology with the new technology it...
King Fisher Aviation is considering an investment in a new technology for a drone project with...
King Fisher Aviation is considering an investment in a new technology for a drone project with a price of $16 million. Their current technology has a book value of $5 million and a market value of $5 million. The new technology is expected to have a five (5) year life, and the old technology has three (3) years left in which it can be expected to be used. If the firm replaces the old technology with the new technology it...
King Fisher Aviation is considering an investment in a new technology for a drone project with...
King Fisher Aviation is considering an investment in a new technology for a drone project with a price of $16 million. Their current technology has a book value of $5 million and a market value of $5 million. The new technology is expected to have a five (5) year life, and the old technology has three (3) years left in which it can be expected to be used. If the firm replaces the old technology with the new technology it...
King Fisher Aviation is considering an investment in a new technology for a drone project with...
King Fisher Aviation is considering an investment in a new technology for a drone project with a price of $16 million. Their current technology has a book value of $5 million and a market value of $5 million. The new technology is expected to have a five (5) year life, and the old technology has three (3) years left in which it can be expected to be used. If the firm replaces the old technology with the new technology it...
King Fisher Aviation is considering an investment in a new technology for a drone project with...
King Fisher Aviation is considering an investment in a new technology for a drone project with a price of $16 million. Their current technology has a book value of $5 million and a market value of $5 million. The new technology is expected to have a five (5) year life, and the old technology has three (3) years left in which it can be expected to be used. If the firm replaces the old technology with the new technology it...
A project has annual cash flows of $5,500 for the next 10 years and then $7,000...
A project has annual cash flows of $5,500 for the next 10 years and then $7,000 each year for the following 10 years. The IRR of this 20-year project is 13.38%. If the firm's WACC is 9%, what is the project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. Please Explain using Excel
A project has annual cash flows of $7,000 for the next 10 years and then $5,500...
A project has annual cash flows of $7,000 for the next 10 years and then $5,500 each year for the following 10 years. The IRR of this 20-year project is 11.38%. If the firm's WACC is 9%, what is the project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.
A project has annual cash flows of $6,000 for the next 10 years and then $5,500...
A project has annual cash flows of $6,000 for the next 10 years and then $5,500 each year for the following 10 years. The IRR of this 20-year project is 12.46%. If the firm's WACC is 9%, what is the project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT