A project that costs $3000 to iinstall will provide annual cash flows of $800 for each...

A project that costs $3000 to iinstall will provide annual cash flows of $800 for each of the next 6 years. The firm accepts projects with a discounted payback of 5 years or less. Should this project be pursued if the discount rate is 2%? What if the discount rate is 12%? Will the firm's decision change as the discount rate changes?

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jeff jeffy answered 2 years ago

A project provides annual cash flows of £800 per year for 8 years and costs £3000...

A project provides annual cash flows of £800 per year for 8 years and costs £3000 today. Is this a good project if the required return is 8%? At what discount rate would you be indifferent between accepting the project and rejecting it?

A project that costs $3,700 to install will provide annual cash flows of $1,150 for each...

A project that costs $3,700 to install will provide annual cash flows of $1,150 for each of the next 6 years. a. What is NPV if the discount rate is 11%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. How high can the discount rate be before you would reject the project? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

A project that costs $2,500 to install will provide annual cash flows of $750 for each...

A project that costs $2,500 to install will provide annual cash flows of $750 for each of the next 5 years. a. Calculate the NPV if the opportunity cost of capital is 10%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) NPV $ b. Is this project worth pursuing? Yes No c. What is the project's internal rate of return IRR? (Do not round intermediate calculations. Round your answer to 2 decimal places.) IRR %

A project that costs $2,800 to install will provide annual cash flows of $630 for the...

A project that costs $2,800 to install will provide annual cash flows of $630 for the next 6 years. The firm accepts projects with payback periods of less than 4 years. a-1. What is this project's payback period? (Round your answer to 3 decimal places.) Payback period years a-2. Will the project be accepted? No Yes b-1. What is project NPV if the discount rate is 2%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) 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...

Your firm is considering a project that costs $67,277. This opportunity will provide cash flows of...

Your firm is considering a project that costs $67,277. This opportunity will provide cash flows of $20,706, $24,210, $20,287, and $24,022 over the next four years. Your firm has a required rate of return of 14%. What is the project's npv?

A project that provides annual cash flows of $13,500 for 6 years costs $57,112 today. (a)...

A project that provides annual cash flows of $13,500 for 6 years costs $57,112 today. (a) If the required return is 13 percent, what is the NPV for this project? (b) Determine the IRR for this project.

A project that provides annual cash flows of $17,000 for 6 years costs $60,000 today. a....

A project that provides annual cash flows of $17,000 for 6 years costs $60,000 today. a. If the required return is 10 percent, what is the NPV for this project? b. Determine the IRR for this project.

An investment project costs $18,900 and has annual cash flows of $3,700 for six years. ...

An investment project costs $18,900 and has annual cash flows of $3,700 for six years. Required : (a) What is the discounted payback period if the discount rate is zero percent? (b) What is the discounted payback period if the discount rate is 4 percent? (c) What is the discounted payback period if the discount rate is 22 percent?

A project that provides annual cash flows of $14,700 for 9 years costs $81,395 today. A)...

A project that provides annual cash flows of $14,700 for 9 years costs $81,395 today. A) If the required return is 4 percent, what is the NPV for this project? B)Determine the IRR for this project.

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