Question
In: Finance
One research project will cost $500,000 today and is expected to yield benefits of $50,000 at...
One research project will cost $500,000 today and is expected to yield benefits of $50,000 at the end of each of the next 30 years. A second project will cost $400,000 and yield a single cash flow of $800,000 in 6 years. What is the difference in the IRR’s of these research projects?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
A project will cost $50,000 today and produce equal after tax cash flows for the next...
A project will cost $50,000 today and produce equal after tax
cash flows for the next seven years (these will be the only cash
flows from the project). Your discount rate is 13%. If it turns out
your payback period is four years, what is the net present value of
this project?
A company has an investment project that would cost $10 million today and yield a payoff...
A company has an investment project that would cost $10 million
today and yield a payoff of $15 million in 4 years.
a. Should the firm undertake the project if the interest rate is
11 percent? 10 percent?
b. Can you figure out the exact cutoff for the interest rate
between profitability and non-profitability?
Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of...
Project S has a cost of $10,000 and is expected to produce
benefits (cash flows) of $3,000 per year for 5 years. Project L
costs $25,000 and is expected to produce cash flows of $7,400 per
year for 5 years.
Calculate the two projects' NPVs, assuming a cost of capital of
12%. Do not round intermediate calculations. Round your answers to
the nearest cent.
Project S: $
Project L: $
Which project would be selected, assuming they are mutually
exclusive?...
Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of...
Project S has a cost of $10,000 and is expected to produce
benefits (cash flows) of $4,000 per year for 5 years. Project L
costs $21,000 and is expected to produce cash flows of $8,000 per
year for 5 years. Calculate the two projects’ NPVs, IRRs, MIRRs,
PIs, and Pay Back Period assuming a cost of capital of 12%. Which
project would be selected, assuming they are mutually exclusive,
using each ranking method? Which should actually be selected?
Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of...
Project S has a cost
of $10,000 and is expected to produce benefits (cash flows) of
$3,000 per year for 5 years. Project L costs $25,000 and is
expected to produce cash flows of $7,400 per year for 5 years.
Calculate the two
projects' NPVs, assuming a cost of capital of 12%. Do not round
intermediate calculations. Round your answers to the nearest
cent.
Project S:
$
Project L:
$
Which project would be
selected, assuming they are mutually exclusive?...
Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of...
Project S has a cost of $10,000 and is expected to produce
benefits (cash flows) of $3,000 per year for 5 years. Project L
costs $25,000 and is expected to produce cash flows of $7,400 per
year for 5 years.
Calculate the two projects' PIs, assuming a cost of capital of
12%. Do not round intermediate calculations. Round your answers to
three decimal places.
Project S:
Project L:
Angela's LandBuyers has a new commercial real estate development proposal. The project will cost $500,000 today...
Angela's LandBuyers has a new commercial real estate development
proposal. The project will cost $500,000 today and produce positive
cash inflows of $150,000 for each of the next six years. In year
six, the project also requires an environmental revitalization cost
of $50,000. Based on these initial figures, Angela's has calculated
that the project produces a positive NPV and has an IRR greater
than the required return of 15%. Prior to making a final decision
about the project, the town's...
A project has an initial cost of $50,000, expected net cash inflows of $8,000 per year...
A project has an initial cost of $50,000, expected net cash
inflows of $8,000 per year for 12 years, and a cost of capital of
13%. What is the project's MIRR? (Hint: Begin by constructing a
time line.) Do not round intermediate calculations. Round your
answer to two decimal places.
A project has an initial cost of $50,000, expected net cash inflows of $11,000 per year...
A project has an initial cost of $50,000, expected net cash
inflows of $11,000 per year for 9 years, and a cost of capital of
11%. What is the project's IRR? Round your answer to two decimal
places.
Cost of $50,000 in 2024 (four years from today).
Cost of $50,000 in 2024 (four years from today).A.) How much will you need to set aside for 48 months at 6%
nominal interest / year, compounded monthly, in order to pay the
$50,000?B.) Make 24 monthly payments at 6% interest, what are the
monthly payments?
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