Question
In: Finance
Suppose your firm is considering investing in a project with the cash flows shown below, that...
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 11 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3 and 3.5 years, respectively.
| Time: | 0 | 1 | 2 | 3 | 4 | 5 |
| Cash flow: | –$235,000 | $65,800 | $84,000 | $141,000 | $122,000 | $81,200 |
Use the IRR decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.)
What is the IRR?
Solutions
Expert Solution
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jeff jeffy answered 1 year agoRelated Solutions
Suppose your firm is considering investing in a project with the cash flows shown below, that...
Suppose your firm is considering investing in a project with the
cash flows shown below, that the required rate of return on
projects of this risk class is 8 percent.
Time:
0
1
2
3
4
5
6
Cash flow:
–$8,600
$1,080
$2,280
$1,480
$1,480
$1,280
$1,080
Use the IRR decision rule to evaluate this project.
(Negative amount should be indicated by a minus sign. Round
your answer to 2 decimal places.)
IRR%=
Should it be accepted or rejected?
Suppose your firm is considering investing in a project with the cash flows shown below, that...
Suppose your firm is
considering investing in a project with the cash flows shown below,
that the required rate of return on projects of this risk class is
9 percent, and that the maximum allowable payback and discounted
payback statistics for the project are 2.0 and 3.0 years,
respectively.
Time:
0
1
2
3
4
5
6
Cash flow:
−$7,600
$1,190
$2,390
$1,590
$1,590
$1,390
$1,190
Use the NPV decision rule to evaluate this project.
(Negative amount should be indicated...
Suppose your firm is considering investing in a project with the cash flows shown below, that...
Suppose your firm is considering investing in a project with the
cash flows shown below, that the required rate of return on
projects of this risk class is 12 percent, and that the maximum
allowable payback and discounted payback statistic for the project
are 2 and 3 years, respectively.
Time
0
1
2
3
4
5
6
Cash Flow
-1,150
30
570
770
770
370
770
Use the discounted payback decision rule to evaluate this project;
should it be accepted...
Suppose your firm is considering investing in a project with the cash flows shown below, that...
Suppose your firm is considering investing in a project with the
cash flows shown below, that the required rate of return on
projects of this risk class is 9 percent, and that the maximum
allowable payback and discounted payback statistics for the project
are 3.5 and 4.5 years, respectively. Time: 0 1 2 3 4 5 6 Cash flow
–$5,200 $1,250 $2,450 $1,650 $1,570 $1,450 $1,250 Use the payback
decision rule to evaluate this project. (Round your answer to 2...
Suppose your firm is considering investing in a project with the cash flows shown below, that...
Suppose your firm is considering investing in a project with the
cash flows shown below, that the required rate of return on
projects of this risk class is 10 percent, and that the maximum
allowable payback and discounted payback statistic for the project
are 2 and 3 years, respectively.
Time
0
1
2
3
4
5
6
Cash Flow
-1,050
150
450
650
650
250
650
Use the payback decision rule to evaluate this project; should it
be accepted or...
Suppose your firm is considering investing in a project with the cash flows shown below, that...
Suppose your firm is considering investing in a project with the
cash flows shown below, that the required rate of return on
projects of this risk class is 8 percent, and that the maximum
allowable payback and discounted payback statistics for the project
are 3.5 and 4.5 years, respectively. Time: 0 1 2 3 4 5 6 Cash flow:
?$5,000 $1,200 $2,400 $1,600 $1,600 $1,400 $1,200 Use the
discounted payback decision rule to evaluate this project.
Suppose your firm is considering investing in a project with the cash flows shown below, that...
Suppose your firm is considering investing in a project with the
cash flows shown below, that the required rate of return on
projects of this risk class is 7 percent, and that the maximum
allowable payback and discounted payback statistics for the project
are 3.5 and 4.5 years, respectively.
Time: 0 1 2 3 4 5 6
Cash flow: −$5,100 $1,240 $2,440 $1,640 $1,560 $1,440 $1,240
Use the payback decision rule to evaluate this project.
How many years will it...
Suppose your firm is considering investing in a project with the cash flows shown below, that...
Suppose your firm is considering investing in a project with the
cash flows shown below, that the required rate of return on
projects of this risk class is 11 percent, and that the maximum
allowable payback and discounted payback statistic for the project
are 2 and 3 years, respectively.
Time
0
1
2
3
4
5
6
Cash Flow
-1,140
40
560
760
760
360
760
Use the payback decision rule to evaluate this project; should it
be accepted or...
Suppose your firm is considering investing in a project with the cash flows shown below, that...
Suppose your firm is considering investing in a project with the
cash flows shown below, that the required rate of return on
projects of this risk class is 7 percent, and that the maximum
allowable payback and discounted payback statistics for the project
are 3.5 and 4.5 years, respectively.
Time:
0
1
2
3
4
5
6
Cash
flow
–$5,000
$1,270
$2,470
$1,670
$1,670
$1,470
$1,270
Use the discounted payback decision rule to evaluate this
project. (Round your...
Suppose your firm is considering investing in a project with the cash flows shown below, that...
Suppose your firm is considering investing in a project with the
cash flows shown below, that the required rate of return on
projects of this risk class is 12 percent, and that the maximum
allowable payback and discounted payback statistic for the project
are 2 and 3 years, respectively. Time 0 1 2 3 4 5 6 Cash Flow
-1,030 130 470 670 670 270 670
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