Question
In: Finance
+Consider a Project that requires an initial investment of 2000 and generates cash flows of 200,...
+Consider a Project that requires an initial investment of 2000 and generates cash flows of 200, 600, 800 and 1200 in years 1 through 4. Use a discount rate of 10%
Compute the Payback period (in years) for the project
+Consider a Project that requires an initial investment of 2000 and generates cash flows of 200, 600, 800 and 1200 in years 1 through 4. Use a discount rate of 10%
Compute the discounted payback period (in years) for the project
+Consider a Project that requires an initial investment of 2000 and generates cash flows of 200, 600, 800 and 1200 in years 1 through 4. Use a discount rate of 10%
Compute the profitability index for the project (enter in numeric firm)
Consider a Project that requires an initial investment of 2000 and generates cash flows of 200, 600, 800 and 1200 in years 1 through 4. Use a discount rate of 10%
Compute the NPV of the project
Correct Answer:
98.35
The answer is already given I just want to know the work process to get that correct answer
Solutions
jeff jeffy answered 1 year agoRelated Solutions
1).A project requires an initial investment of $973,000. The projects generates cash flows of $250,000 in...
1).A project requires an initial investment of $973,000. The
projects generates cash flows of $250,000 in year 1, $300,000 in
year 2, $300,000 in year 3, $400,000 in year 4 and $400,000 in year
5. If the required rate of return for the project is 12 percent,
the payback period is ____________ and the discounted payback
period is _______________.
A).3.7 years; 4.5 years B).2.8
years; 3.9 years C). 2.8 years; 4.2 years
D).3.3 years; 3.9 years E).3.3
years; 4.2 years...
3. A 5-year project requires an initial investment of $28 million. It generates an annual cash...
3. A 5-year project requires an
initial investment of $28 million. It generates an annual cash flow
of $9 million. The unlevered cost of equity is 20%. A loan of $22.5
million at a rate of 10%. Principal will be repaid in a lump sum
when project ends. However, the lender will extend the loan for
only three years. The firm’s tax rate is 30%. Calculate the
project’s adjusted present value.
Consider a project that requires an initial investment of $103,000 and will produce a single cash...
Consider a project that requires an initial investment of
$103,000 and will produce a single cash flow of $148,000 in 4
years.
What is the NVP of this project if the 4 year interest rate is
5.2% (EAR) ?
What is the NPV of this project if the 4 year interest rate is
9.8% (EAR)?
What is the highest 4 year interest rate such that this project
is still profitable?
Project E requires an initial investment of $100,000 and the produces annual cash flows of $42,000...
Project E requires an initial investment of $100,000 and the
produces annual cash flows of $42,000 per year for each of the next
3 years. Project L also requires an initial investment of $100,000
and produces cash flows of $35000 in year 1, $45,000 in year 2, and
$75,000 in year 3. If the discount rate is 15% and the projects are
mutually exclusive.
a) Project L should be chosen
b) Neither project is chosen
c) Project E should be...
Project Black Swan requires an initial investment of $115,000. It has positive cash flows of $140,000...
Project Black Swan requires an initial investment of $115,000.
It has positive cash flows of $140,000 for each of the next two
years. Because of major demolition and environmental clean-up
costs, cash flow for the third and final year of the project is
$(170,000). If the company 's required rate of return is 12%, the
project should be
A) rejected because the IRR is less than 12%.
B) accepted because the NPV is positive at 12%.
C) rejected because there...
Assume a new project requires an initial investment of $10 million dollars, with ensuing cash flows...
Assume a new project requires an initial investment of $10
million dollars, with ensuing cash flows of $2, $4 and $5 million
in years 1, 2 and 3. Assuming the company's WACC is 10%, which of
the following statements is true?
a. The firm should reject the project, as the IRR is lower than
the WACC.
b. The firm should accept the project, as the IRR is higher than
the WACC.
c. The firm should accept the project, as the...
Assume a new project requires an initial investment of $6 million dollars, with ensuing cash flows...
Assume a new project requires an initial investment of $6
million dollars, with ensuing cash flows of $1, $3 and $5 million
in years 1, 2 and 3. Assuming the company's WACC is 10%, which of
the following statements is true?
a.) The firm should accept the project, as the IRR is lower than
the WACC.
b.) The firm should reject the project, as the IRR is higher
than the WACC.
c.) The firm should accept the project, as the...
Assume a new project requires an initial investment of $10 million dollars, with ensuing cash flows...
Assume a new project requires an initial investment of $10
million dollars, with ensuing cash flows of $2, $4 and $5 million
in years 1, 2 and 3. Assuming the company's WACC is 10%, which of
the following statements is true?
The firm should reject the project, as the IRR is lower than the
WACC.
The firm should accept the project, as the IRR is higher than
the WACC.
The firm should accept the project, as the NPV is positive....
Assume a new project requires an initial investment of $10 million dollars, with ensuing cash flows...
Assume a new project requires an initial investment of $10
million dollars, with ensuing cash flows of $2, $4 and $5 million
in years 1, 2 and 3. Assuming the company's WACC is 10%, which of
the following statements is true?
The firm should reject the project, as the IRR is lower than the
WACC.
The firm should accept the project, as the IRR is higher than
the WACC.
The firm should accept the project, as the NPV is positive....
Consider the Obsidian Project, which requires an investment of $434,471 initially, with subsequent cash flows of...
Consider the Obsidian Project, which requires an investment of
$434,471 initially, with subsequent cash flows of $51,898, $74,626
and $98,063. We can characterize the project with the following
end-of-year cash flows:
Period
Cash Flow
0
(434,471)
1
51,898
2
74,626
3
98,063
What is the net present value (NPV) of the Obsidian
Project if the required rate of return for the project is
9%?
Round your answer to 2 decimal places (e.g. 125.74632 =
125.75).
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