Question
In: Finance
Your division is considering two investment projects, each of which requires an up-front expenditure of $35...
Your division is considering two investment projects, each of which requires an up-front expenditure of $35 million. You estimate that the cost of capital is 9% and that the investments will produce the following after-tax cash flows (in millions of dollars):
|
Year |
Project X |
Project Y |
|
1 |
5 |
20 |
|
2 |
10 |
10 |
|
3 |
15 |
8 |
|
4 |
20 |
6 |
|
5 |
21 |
9 |
1.What is the regular payback period for project X?
2.What is the regular payback period for project Y?
3.What is the discounted payback period for project X?
4.What is the discounted payback period for project Y?
5.What is the net present value of project X?
6.What is the net present value of project Y?
7.What is the internal rate of return (IRR) for project X?
8.What is the internal rate of return (IRR) for project Y?
9.What is the modified IRR (MIRR) for project X?
10.What is the modified IRR (MIRR) for project Y?
11.If both projects are mutually exclusive, which project/projects do you choose?
12.If the projects are independent, which project/projects do you choose?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Your division is considering two investment projects, each of which requires an up-front expenditure of $17...
Your division is considering two investment projects, each of
which requires an up-front expenditure of $17 million. You estimate
that the investments will produce the following net cash flows:
Year
Project A
Project B
1
$ 5,000,000
$20,000,000
2
10,000,000
10,000,000
3
20,000,000
6,000,000
What are the two projects' net present values, assuming the cost
of capital is 5%, 10% and 15%?
What are the two projects' IRRs at these same costs of
capital?
Your division is considering two investment projects, each of which requires an up-front expenditure of $17...
Your division is considering two investment projects, each of
which requires an up-front expenditure of $17 million. You estimate
that the investments will produce the following net cash flows:
Year
Project A
Project B
1
$ 5,000,000
$20,000,000
2
10,000,000
10,000,000
3
20,000,000
6,000,000
What are the two projects' net present values, assuming the cost
of capital is 5%? Do not round intermediate calculations. Round
your answers to the nearest dollar.
Project A: $
Project B: $
What are the two...
NPV Your division is considering two investment projects, each of which requires an up-front expenditure of...
NPV
Your division is considering two investment projects, each of
which requires an up-front expenditure of $15 million. You estimate
that the investments will produce the following net cash flows:
Year
Project A
Project B
1
$ 5,000,000
$20,000,000
2
10,000,000
10,000,000
3
20,000,000
6,000,000
What are the two projects' net present values, assuming the cost
of capital is 5%? Do not round intermediate calculations. Round
your answers to the nearest dollar.
Project A: $
Project B: $
What are the...
Your division is considering two investment projects, each of which requires an up-front expenditure of $24...
Your division is considering two investment projects, each of
which requires an up-front expenditure of $24 million. You estimate
that the cost of capital is 11% and that the investments will
produce the following after-tax cash flows (in millions of
dollars):
Year Project A Project B
1 5 20
2 10 10
3 15 8
4 20 6
What is the regular payback period for each of the projects?
Round your answers to two decimal places.
Project A
Project B...
Your division is considering two investment projects, each of which requires an up-front expenditure of $20...
Your division is considering two investment projects, each of
which requires an up-front expenditure of $20 million. You estimate
that the investments will produce the following net cash flows:
Year Project A Project B
1 $4,500,000 $20,000,000
2 10,000,000 10,000,000
3 20.000.000 6,500,000
What are the two project’s NPVs assuming the cost of capital is
3%, 12%, 17%?
What are the two projects’ IRRs at those same costs of
capital?
NPV Your division is considering two investment projects, each of which requires an up-front expenditure of...
NPV
Your division is considering two investment projects, each of
which requires an up-front expenditure of $17 million. You estimate
that the investments will produce the following net cash flows:
Year
Project A
Project B
1
$ 4,000,000
$20,000,000
2
10,000,000
10,000,000
3
20,000,000
6,000,000
What are the two projects' net present values, assuming the cost
of capital is 5%? Do not round intermediate calculations. Round
your answers to the nearest dollar.
Project A: $
Project B: $
What are the...
Your division is considering two facility investment projects, each of which requires an up-front expenditure of...
Your division is considering two facility investment projects,
each of which requires an up-front expenditure of $15 million. You
estimate that the investments will produce the following net cash
flows: Year Project A Project B 1 $5,000,000 $20,000,000 2
$10,000,000 $10,000,000 3 $20,000,000 $6,000,000 What are the
project's net present values, assuming the cost of the capital is
a)10% b)5% )15%? What does this analysis tell you about the
projects?
Your division is considering two investment projects, each of which requires an up-front expenditure of $23...
Your division is considering two investment projects, each of
which requires an up-front expenditure of $23 million. You estimate
that the investments will produce the following net cash flows:
Year
Year Project A Project B
1 $ 6,000,000 $20,000,000
2 10,000,000 10,000,000
3 20,000,000 8,000,000
What are the two projects' net present values, assuming the cost
of capital is 5%? Round your answers to the nearest dollar.
Project A $ Project B $
What are the two projects' net present...
NPV Your division is considering two investment projects, each of which requires an up-front expenditure of...
NPV Your division is considering two investment projects, each
of which requires an up-front expenditure of $23 million. You
estimate that the investments will produce the following net cash
flows: Year Project A Project B 1 $ 5,000,000 $20,000,000 2
10,000,000 10,000,000 3 20,000,000 6,000,000
What are the two projects' net present values, assuming the cost
of capital is 5%? Round your answers to the nearest dollar.
Project A $ Project B $
What are the two projects' net present...
Your division is considering two investment projects, each of which requires an up-front expenditure of $14...
Your division is considering two investment projects, each of
which requires an up-front expenditure of $14 million. You estimate
that the investments will produce the following net cash flows:
Year
Year
$5,000,000
$20,000,000
1
10,000,000
10,000,000
2
20.000.000
6,000,000
3
a. What are the two project’s NPVs assuming the cost of capital
is 4%, 11%, 16%?
b. What are the two projects’ IRRs at those same costs of
capital?
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