Question
In: Finance
Your company is considering the following three projects. &nbs
Your company is considering the following three projects.
CF0 CF1 CF2 CF3 CF4
Project Whiskey -100 80 20 80 20
Project Tango -100 20 80 20 80
Project Foxtrot -100 50 50 50 50
What is Project Whiskey’s discounted payback period if our WACC is 8%? Should the project be accepted if the maximum payback period is 4.05 years? Show your work to receive full credit.
Solutions
jeff jeffy answered 3 years agoRelated Solutions
Your company is considering three independent projects. Given the following cash flow information, calculate the payback...
Your company is considering three independent projects. Given
the following cash flow information, calculate the payback period
for each. If your company requires a three-year payback before an
investment can be accepted, which project(s) would be accepted?
Project D Project E Project F
Cost 205,000.00 179,000.00 110,000.00
Inflow year 1 53,000.00 51,000.00 25,000.00
Inflow year 2 50,000.00 87,000.00 55,000.00
Inflow year 3 48,000.00 41,000.00 21,000.00
Inflow year 4 30,000.00 52,000.00 9,000.00
Inflow year 5 24,000.00 40,000.00 35,000.00
Payback Period EXACT...
The Winston Co. is considering two mutually exclusive projects with the following cash flows: &nbs
The Winston Co. is considering two mutually exclusive projects
with the following cash flows:
Project
A
Project B
Year
Cash
Flow
Cash Flow
0
-$75,000
-$60,000
1
$30,000
$25,000
2
$35,000
$30,000
3
$35,000
$25,000
B-1
what is the IRR of project A?
B-2
What is the IRR of project B?
B-3
Based on the IRR rule, which project should be accepted and
why?
B-4...
Your company is considering the following three projects. CF0 CF1 CF2 CF3 CF4 Project Whiskey -100...
Your company is considering the following three projects.
CF0 CF1 CF2 CF3 CF4
Project Whiskey -100 80 20 80 20
Project Tango -100 20 80 20 80
Project Foxtrot -100 50 50 50 50
1) What is Project Foxtrot’s MIRR? And, should the project be
accepted if we used MIRR as the basis of decision? Assume that the
cost of capital is 8%. Show your calculator inputs (CF0=?, CF1=?,
CF2=?, CF3=?, CF4=?, etc.) to receive full credit.
2) What is...
Your company is trying to decide between the following three projects. In your calculations, assume a...
Your company is trying to decide between the following three
projects. In your calculations, assume a 6% interest rate. Project
A Project B Project C Project A has $400 in upfront costs in year 0
and gets 250 in benefits in year 0. It accrues $300 in benefits
each year in years 1-3, and has annual costs of $200 in years 1-3.
Project B costs $1300 in year 0 and has no benefits in year 0. It
accrues $650 in...
A company is considering three projects (G, H, and I) that have the following expected cash...
A company is considering three projects (G, H, and I)
that have the following expected cash flows and risk-adjusted
discount rates.
Project
Discount Rate (k)
Initial Investment
Year 1
Year 2
Year 3
Year 4
Year 5
G
9.0%
($800)
$200
$200
$200
$200
$250
H
5.0%
($500)
$300
$50
$50
$50
$200
I
7.0%
($400)
$90
$120
$150
$100
$50
The company wants to rank the projects based on PI.
Which project has the highest PI?
Project G
Project...
Iggy Company is considering three capital expenditure projects. Relevant data for the projects are as follows....
Iggy Company is considering three capital expenditure projects.
Relevant data for the projects are as follows.
Project
Investment
Annual
Income
Life of
Project
22A
$240,600
$17,220
6 years
23A
271,400
21,000
9 years
24A
284,100
15,700
7 years
Annual income is constant over the life of the project. Each
project is expected to have zero salvage value at the end of the
project. Iggy Company uses the straight-line method of
depreciation.
Click here to view the factor table.
(a)
Determine...
Iggy Company is considering three capital expenditure projects. Relevant data for the projects are as follows....
Iggy Company is considering three capital expenditure projects.
Relevant data for the projects are as follows.
Project
Investment
Annual
Income
Life of
Project
22A
$240,600
$17,220
6 years
23A
271,400
21,000
9 years
24A
284,100
15,700
7 years
Annual income is constant over the life of the project. Each
project is expected to have zero salvage value at the end of the
project. Iggy Company uses the straight-line method of
depreciation.
Click here to view the factor table.
(a)
Determine...
Marigold Company is considering three capital expenditure projects. Relevant data for the projects are as follows....
Marigold Company is considering three capital expenditure
projects. Relevant data for the projects are as follows.
Project
Investment
Annual
Income
Life of
Project
22A
$243,300
$16,860
6 years
23A
274,200
20,730
9 years
24A
280,500
15,700
7 years
Annual income is constant over the life of the project. Each
project is expected to have zero salvage value at the end of the
project. Marigold Company uses the straight-line method of
depreciation.
Click here to view PV table.
(a)
Determine the...
Iggy Company is considering three capital expenditure projects. Relevant data for the projects are as follows....
Iggy Company is considering three capital expenditure projects.
Relevant data for the projects are as follows.
Project
Investment
Annual
Income
Life of
Project
22A
$243,000
$16,720
6 years
23A
270,900
20,620
9 years
24A
283,300
15,700
7 years
Annual income is constant over the life of the project. Each
project is expected to have zero salvage value at the end of the
project. Iggy Company uses the straight-line method of
depreciation.
Click here to view PV table.
(a)
Determine the...
he ZapCon Company is considering investing in three projects. If it fully invests in a project,...
he ZapCon Company is considering investing in three projects. If
it fully invests in a project, the realized cash flows (in millions
of dollars) will be as listed in the file P04_99.xlsx. For example,
project 1 requires a cash outflow of $3 million today and returns
$5.5 million 36 months from now. Today, ZapCon has $3 million in
cash. At each time point (0, 6, 12, 18, 24, and 30 months from
today), the company can, if desired, borrow up...
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