118. A 30 year project is estimated to cost $35 million dollars and provide annual cash...

118. A 30 year project is estimated to cost $35 million dollars and provide annual cash flows of $5 per year in years 1-5; $4 million per year in years 6-20 and $2 million per year in years 21-30. If the company's required rate of return is 10%, determine the discounted payback for the project.

Solutions

Expert Solution

Solution :

Discounted payback period: This the period over which investment will be recovered after discounting the cashflows from the investment

Calculated in the excel and value is 15.9 years

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

A 30 year project is estimated to cost $35 million and provideannual cash flows of...

A 30 year project is estimated to cost $35 million and provide annual cash flows of $5 million per year in years 1-5; $4 million per year in years 6-20 and $2 million per year in years 21-30. If the company's required rate of return is 10%, determine the NPV.

A project is estimated to cost $463,565 and provide annual net cash flows of $115,000 for...

A project is estimated to cost $463,565 and provide annual net cash flows of $115,000 for nine years. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968...

Internal Rate of Return A project is estimated to cost $300,495 and provide annual net cash...

Internal Rate of Return A project is estimated to cost $300,495 and provide annual net cash flows of $69,000 for six years. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.352 2.991 6 4.917 4.355 4.111 3.784 3.326 7 5.582 4.868 4.564 4.160 3.605...

Internal Rate of Return A project is estimated to cost $537,280 and provide annual net cash...

Internal Rate of Return A project is estimated to cost $537,280 and provide annual net cash flows of $73,000 for 10 years. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605...

A project has a cost of $10 million, a useful life of 30 years, annual operation...

A project has a cost of $10 million, a useful life of 30 years, annual operation and maintenance costs equal 2% of the capital cost, and annual benefit of $1.5 million.. 1. Find the simple payback period of the project. 2. Find out benefit-cost ratio if the discount rate is 10%

Project cost $100 000 Estimated life 5 years Estimated residual value $20 000 Annual Net Cash...

Project cost $100 000 Estimated life 5 years Estimated residual value $20 000 Annual Net Cash flow $30 000 Required rate of return 10% Given the data above, calculate the internal rate of return (IRR). (not using excel)

You've estimated the following cash flows (in $ million) for two mutually exclusive projects: Year Project...

You've estimated the following cash flows (in $ million) for two mutually exclusive projects: Year Project A Project B 0 -29 -45 1 30 45 2 40 50 3 50 50 The appropriate discount rate is 9%. Part 1 What is the NPV of project A (in $ million)? Part 2 What is the NPV of project B (in $ million)?

Calculate the NPV of a 20-year project with a cost of $300,000 and annual cash flows...

Calculate the NPV of a 20-year project with a cost of $300,000 and annual cash flows of $25,000 in years 1-10 and $50,000 in years 11-20. The company's required rate of return is 10%

Project A is as follows: $100,000 upfront cost and annual cash flows of $25,000 a year...

Project A is as follows: $100,000 upfront cost and annual cash flows of $25,000 a year for seven years. Project B is as follows: $100,000 upfront cost and cash flow of $20,000 per year for 8 years. Project A Payback Period is 4 years and Project B is 5 years. using that data calculate NPV for projects A and B using a 10% discount rate. which project do you pick if they are mutually exclusive? Which do you pick if...

Subjects