Question
In: Finance
You are evaluating a project (initial investment is $41,000) that is expected to produce cash flows...
You are evaluating a project (initial investment is $41,000) that is expected to produce cash flows of $5,000 each year for the next ten years and $7,000 each year for the following ten years. The IRR of this project is 12%. The firm’s WACC is 8%. What is the project’s NPV?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
You are evaluating a project with the following cash flows: initial investment is $-23, and the expected...
You are evaluating a project with the following cash flows:
initial investment is $-23, and the expected cash flows
for years 1 - 3 are $12, $9 and $8 (all cash flows are in millions
of dollars). What is this projects NPV? The company's WACC is
9%.
Express your answer in millions of dollars, rounded to 2
decimals and without the dollar sign. So, if your answer is
23.5678, just enter 23.57.
You are evaluating a project that will cost $497,000, but is expected to produce cash flows...
You are evaluating a project that will cost
$497,000,
but is expected to produce cash flows of
$123,000
per year for
10
years, with the first cash flow in one year. Your cost of
capital is
11.2%
and your company's preferred payback period is three years or
less.
a. What is the payback period of this project?
b. Should you take the project if you want to increase the value
of the company?
a. What is the payback period of...
A). You are evaluating a project with the following cash flows: initial investment is $-12, and...
A).
You are evaluating a project with the following cash flows:
initial investment is $-12, and the expected cash flows for years 1
- 3 are $10, $11 and $17 (all cash flows are in millions of
dollars). What is this projects NPV? The company's WACC is 10%.
B).
You are evaluating a project with an initial investment of $16.9
million dollars, and expected cash flows of $7 million dollars each
for years 1-3. What is the project's simple payback?...
You are evaluating a project that is expected to produce cash flows of $5,000 each year...
You are evaluating a project that is expected to produce cash
flows of $5,000 each year for the next 3 years and $7,000 each year
for the following 3 years. The IRR of this 6-year project is 12%.
If the firm’s WACC is 10%, what is the project’s NPV?
A project requires an initial investment of $100,000 and is expected to produce a cash inflow...
A project requires an initial investment of $100,000 and is
expected to produce a cash inflow before tax of $27,300 per year
for five years. Company A has substantial accumulated tax losses
and is unlikely to pay taxes in the foreseeable future. Company B
pays corporate taxes at a rate of 21% and can claim 100% bonus
depreciation on the investment. Suppose the opportunity cost of
capital is 10%. Ignore inflation.
a. Calculate project NPV for each company.
(Do not...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow...
A project requires an initial investment of $100,000 and is
expected to produce a cash inflow before tax of $27,800 per year
for five years. Company A has substantial accumulated tax losses
and is unlikely to pay taxes in the foreseeable future. Company B
pays corporate taxes at a rate of 21% and can claim 100% bonus
depreciation on the investment. Suppose the opportunity cost of
capital is 11%. Ignore inflation.
A.Calculate project NPV for each company. (Do not round...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow...
A project requires an initial investment of $100,000 and is
expected to produce a cash inflow before tax of $26,200 per year
for five years. Company A has substantial accumulated tax losses
and is unlikely to pay taxes in the foreseeable future. Company B
pays corporate taxes at a rate of 30% and can depreciate the
investment for tax purposes using the five-year MACRS tax
depreciation schedule. Suppose the opportunity cost of capital is
8%. Ignore inflation.
a. Calculate project...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow...
A project requires an initial investment of $100,000 and is
expected to produce a cash inflow before tax of $26,600 per year
for five years. Company A has substantial accumulated tax losses
and is unlikely to pay taxes in the foreseeable future. Company B
pays corporate taxes at a rate of 21% and can claim 100% bonus
depreciation on the investment. Suppose the opportunity cost of
capital is 9%. Ignore inflation. Calculate the NPV for each
company. What is the...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow...
A project requires an initial investment of $100,000 and is
expected to produce a cash inflow before tax of $27,700 per year
for five years. Company A has substantial accumulated tax losses
and is unlikely to pay taxes in the foreseeable future. Company B
pays corporate taxes at a rate of 21% and can claim 100% bonus
depreciation on the investment. Suppose the opportunity cost of
capital is 11%. Ignore inflation.
a. Calculate project NPV for each company. (Do not...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow...
A project requires an initial investment of $100,000 and is
expected to produce a cash inflow before tax of $27,300 per year
for five years. Company A has substantial accumulated tax losses
and is unlikely to pay taxes in the foreseeable future. Company B
pays corporate taxes at a rate of 40% and can depreciate the
investment for tax purposes using the five-year MACRS tax
depreciation schedule. Suppose the opportunity cost of capital is
10%. Ignore inflation.
a. Calculate project...
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