Question
In: Finance
What is the NPV of a project that costs $10,000 today and another $10,000 in one...
What is the NPV of a project that costs $10,000 today and another $10,000 in one year, and is then expected to generate 8 annual cash inflows of $4,000 each starting at the end of year 6? The expected return on the market is 9.4%, the risk-free rate is 2% and the project’s beta is 1.4.
Solutions
jeff jeffy answered 1 year agoRelated Solutions
What is the NPV of a project that costs $10,000 today and another $10,000 in one...
What is the NPV of a project that costs $10,000 today and
another $10,000 in one year, and is then expected to generate 8
annual cash inflows of $4,000 each starting at the end of year 6?
The expected return on the market is 9.4%, the risk-free rate is 2%
and the project’s beta is 1.4
What is the NPV of a project that costs $10,000 today and another $10,000 in one...
What is the NPV of a project that costs $10,000 today and
another $10,000 in one year, and is then expected to generate 8
annual cash inflows of $4,000 each starting at the end of year 5?
Assume a cost of capital of 13% and an IRR of 6.17%.
What is the NPV of a project that costs $13,000 today and another $6,000 in one...
What is the NPV of a project that costs $13,000 today and
another $6,000 in one year, and is then expected to generate 11
annual cash inflows of $3,000 starting at the end of year 4. Cost
of capital is 10%. Round to the nearest cent. [Hint: There are two
outflows here, today and year 1. You will need to discount the year
1 cost at the project's discount rate when calculating
PV(outflows).]
What is the NPV of a project that costs $13,000 today and another $7,000 in one...
What is the NPV of a project that costs $13,000 today and
another $7,000 in one year, and is then expected to generate 11
annual cash inflows of $3,000 starting at the end of year 4. Cost
of capital is 11%. Round to the nearest cent. [Hint: There are two
outflows here, today and year 1. You will need to discount the year
1 cost at the project's discount rate when calculating
PV(outflows).]
What is the NPV of a project that costs $120,000 today and is expected to generate...
What is the NPV of a project that costs $120,000 today and is
expected to generate annual cash inflows of $10,000 for the next 12
years, followed by a final inflow of $21,000 in the year after. Use
discount rate of 14%. Round to the nearest cent.
What is the NPV of a project that costs $31,000 today and is expected to generate...
What is the NPV of a project that costs $31,000 today and is
expected to generate annual cash inflows of $11,000 for the next 7
years, followed by a final inflow of $13,000 in year 8. Cost of
capital is 8.7%. Round to the nearest cent.
What is the NPV of a project that costs $111,000 today and is expected to generate...
What is the NPV of a project that costs $111,000 today and is
expected to generate annual cash inflows of $12,000 for the next 11
years. Cost of capital (discount rate) is 11%. Round to the nearest
cent.
What is the NPV of a project that costs $38,000 today and is expected to generate...
What is the NPV of a project that costs $38,000 today and is
expected to generate annual cash inflows of $9,000 for the next 7
years, followed by a final inflow of $15,000 in year 8. Cost of
capital is 7.4%. Round to the nearest cent.
What is the NPV of a project that costs $80,000 today and cash inflows $45,000 annually...
What is the NPV of a project that costs $80,000 today and cash
inflows $45,000 annually for three years from today if the
opportunity cost of capital is 14?
There are two projects that the company is considering: Project A costs 10,000 to implement today,...
There are two projects that the company is considering:
Project A costs 10,000 to implement today, and it brings
subsequent cash flows of 5,900 at the end of year 1; 2,000 at the
end of year 2; 5,000 at the end of year 3.
Project B's initial cost is 7,500, and subsequent cash flows
are 5,000 per year for 3 years.
WACC is 8% for both projects.
Calculate NPV and IRR for each project, and decide which to
recommend.
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