Question

In: Finance

You are considering a project with an initial cash outlay of ​$75,000 and expected free cash...

You are considering a project with an initial cash outlay of ​$75,000 and expected free cash flows of ​$22,000 at the end of each year for 6 years. The required rate of return for this project is 8 percent. What is the​ project's NPV​? What is the​ project's PI​? What is the​ project's IRR​?

Solutions

Expert Solution

Year Cash flow
0 -$75,000
1                       22,000
2                       22,000
3                       22,000
4                       22,000
5                       22,000
6                       22,000
Rate of return 8.00%
NPV                 26,703.35
PI                           1.36
IRR 19.01%

Excel formulas:

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

You are considering a project with an initial cash outlay of ​$ 85,000 and expected free...
You are considering a project with an initial cash outlay of ​$ 85,000 and expected free cash flows of ​$ 28,000 at the end of each year for 7 years. The required rate of return for this project is 9 percent. a. What is the​ project's payback​ period? b. What is the​ project's NPV​? c. What is the​ project's PI​? d. What is the​ project's IRR​?
You are considering a project with an initial cash outlay of ​$70,000 and expected free cash...
You are considering a project with an initial cash outlay of ​$70,000 and expected free cash flows of ​$28,000 at the end of each year for 7 years. The required rate of return for this project is 6 percent. a. What is the​ project's payback​ period? b. What is the​ project's NPV​? c. What is the​ project's PI​? d. What is the​ project's IRR​?
You are considering a project with an initial cash outlay of $85,000 and expected free cash...
You are considering a project with an initial cash outlay of $85,000 and expected free cash flows of $20,000 at the end of each year for 5 years. The required rate of return for this project is 9 percent. a. What is the​ project's payback​ period? b. What is the​ project's NPV​? c. What is the​ project's PI​? d. What is the​ project's IRR​? a. The​ project's payback period is _____years.  ​(Round to two decimal​ places.) b. The​ project's NPV...
You are considering a project with an initial cash outlay of $70,000 and expected free cash...
You are considering a project with an initial cash outlay of $70,000 and expected free cash flows of $15,500 at the end of each year for 5 years. The required rate of return for this project is 5.5 percent. a) (5 pts) What is the payback period of the project? b) (5 pts) What is the project’s NPV? c) (5 pts) What is the project’s IRR? d) (5 pts) If your firm has a required payback of 5years and passing...
You are considering a project with an initial cash outlay of $100,000 and expected free cash...
You are considering a project with an initial cash outlay of $100,000 and expected free cash flows of $23,000 at the end of each year for 6 years. The required rate of return for this project is 10 percent. a. What is the project’s payback period? b. What is the project’s discounted payback period? c. What is the project’s NPV ? d. What is the project’s PI ? e. What is the project’s IRR ? f. What is the project’s...
You are considering a project with an initial cash outlay of ​$72,000 and expected cash flows...
You are considering a project with an initial cash outlay of ​$72,000 and expected cash flows of ​$22,320 at the end of each year for six years. The discount rate for this project is 10.5 percent. a.  What are the​ project's payback and discounted payback​ periods? b.  What is the​ project's NPV? c.  What is the​ project's PI? d.  What is the​ project's IRR? a.  The payback period of the project is nothing years.
You are considering a project with an initial cash outlay of ​$87000 and expected cash flows...
You are considering a project with an initial cash outlay of ​$87000 and expected cash flows of ​$23490 at the end of each year for six years. The discount rate for this project is 10.1 percent. a. What are the​ project's payback and discounted payback​ periods? b. What is the​ project's NPV? c. What is the​ project's PI? d. What is the​ project's IRR?
The Sampson Company is considering a project that requires an initial outlay of $75,000 and produces...
The Sampson Company is considering a project that requires an initial outlay of $75,000 and produces cash inflows of $20,806 each year for five years. Sampson’s cost of capital is 10%. a. Calculate the project’s payback period by making a single division rather than accumulating cash inflows. Why is this possible in this case? b. Calculate the project’s IRR, recognizing the fact that the cash inflows are an annuity. Is the project acceptable? Did your calculation in this part result...
The Sampson Company is considering a project that requires an initial outlay of $75,000 and produces...
The Sampson Company is considering a project that requires an initial outlay of $75,000 and produces cash inflows of $20,806 each year for five years. Sampson's cost of capital is 8%. Calculate the project's payback period by making a single division rather than accumulating cash inflows. Round the answer to two decimal places. year(s) Calculate the project's IRR, recognizing the fact that the cash inflows are an annuity. Round PVFA values in intermediate calculations to four decimal places. Round the...
NPV,​ PI, and IRR calculations​) You are considering a project with an initial cash outlay of...
NPV,​ PI, and IRR calculations​) You are considering a project with an initial cash outlay of ​$70,000 and expected free cash flows of ​$28,000 at the end of each year for 6 years. The required rate of return for this project is 7 percent. a. What is the​ project's payback​ period? b. What is the​ project's NPV​? c. What is the​ project's PI​? d. What is the​ project's IRR​?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT