Question
In: Finance
6. A project has the following total (or net) cash flows. __________________________________________ Year Total (or net)...
6. A project has the following total (or net) cash flows.
__________________________________________
Year Total (or net) cash flow
_________________________________________
1- $20,000
2- 30,000
3- 50,000
4- 60,000
_________________________________________
The required rate of return on the project is 15 percent. The initial investment (or initial cost or initial outlay) of the project is $80,000.
a) Find the net present value (NPV) of the project.
b) Find the profitability index (PI) of the project.
c) Calculate the modified internal rate of return (MIRR) of the project.
Solutions
jeff jeffy answered 1 year agoRelated Solutions
A project has the following total (or net) cash flows. ________________________________________
A project has the following total (or net) cash flows.
________________________________________
Year Total (or net)
cash flow
________________________________________
1 $50,000
2 70,000
3 80,000
4 100,000
_______________________________________
The required rate of return on the project is 13 percent. The
initial investment (or initial cost or initial outlay) of the
project is $100,000.
a) Find the (regular) payback period of the project.
b) Compute the discounted payback period of the project.
6. A project has the following...
A project has the following total (or net) cash flows. __________________________________________ &nbs
A project has the following total (or net) cash flows.
__________________________________________
Year Total
(or net) cash flow
_________________________________________
1 $20,000
2 30,000
3 50,000
4 60,000
_________________________________________
The required rate of return on the project is 15 percent. The
initial investment (or initial cost or initial outlay) of the
project is $80,000.
a) Find the net present value (NPV) of the project.
b) Find the profitability index (PI) of the project.
c) Calculate the modified internal rate...
A project has the following total (or net) cash flows. __________________________________________ &nbs
A project has the following total (or net) cash flows.
__________________________________________
Year Total
(or net) cash flow
_________________________________________
1 $20,000
2 30,000
3 50,000
4 60,000
_________________________________________
The required rate of return on the project is 15 percent. The
initial investment (or initial cost or initial outlay) of the
project is $80,000.
a) Find the net present value (NPV) of the project.
b) Find the profitability index (PI) of the project.
c) Calculate the modified internal rate...
A project has the following total (or net) after-tax cash flows. ____________________________________________________ Year&nbs
A project has the following total (or net) after-tax cash
flows.
____________________________________________________
Year
Total (or net) after-tax cash flow
____________________________________________________
1 $1,000,000
2 1,500,000
3 2,000,000
4 2,500,000
_______________________________________________________
The required rate of return on the project is 15 percent. The
initial investment (or initial cost or initial outlay) of the
project is $4,000,000.
a) Find the (regular) payback period of the project.
b) Compute the discounted payback period of the project.
c) Find...
A four-year financial project has estimates of net cash flows shown in the following table: Year...
A four-year financial project has estimates of net cash flows
shown in the following table:
Year
Net Cash Flow
1
$20,000
2
25,000
3
30,000
4
35,000
It will cost $65,000 to implement the
project, all of which must be invested at the beginning of the
project. After the fourth year, the project will have no residual
value.
Using the most likely estimates of
cash flows, conduct a discounted cash flow calculation assuming a
20 percent hurdle rate with no...
If a project has a cost of $10,000, expected net cash flows of $1500 a year...
If a project has a cost of $10,000, expected net cash flows of
$1500 a year for 12 years and you use a discount rate of 6%, what
is the following:
Payback period (no application of discount rate)
Payback period (using discount rate)
NPV
IRR
Should the project be accepted?
If another project has a cost of $10,000 and has expected life
of 8 years and it will generate $3000 a year should you accept the
project if your boss...
The cash flows and Net salvage value of Project X is given the following table: Year...
The cash flows and Net salvage value of Project X is
given the following table:
Year
Cash flows
Salvage Value
0
-5,800
4,800
1
2,100
3,000
2
3,400
2,200
3
3,600
1,800
4
1,800
0
Based on the Economic Life of this project and the cost of
capital is 12%, in what year should you abandoning this Project
X?
A. Year 3, since NPV in year 3 = $8,429
B. Year 3, since NPV in year 3 = $2,629
C....
Pediatrics Partners is evaluating a project with the following net cash flows and probabilitites. Year Prob....
Pediatrics Partners is evaluating a project with the following
net cash flows and probabilitites.
Year
Prob. =0.25
Prob.=0.5
Prob.=0.25
0
($75,000)
($75,000)
($75,000)
1
15,000
20,000
30,000
2
15,000
20,000
30,000
3
15,000
20,000
30,000
4
15,000
20,000
30,000
5
20,000
30,000
40,000
The Year 5 value includes salvage value. Pediatrics Partners
corporate capital of use is 12%.
A. What is the projects expected NPV assuming average risk? (
Hint: The base case net cash flows are the expected cash...
Mega Dynamics is considering a project that has the following cash flows: Year Project Cash Flow...
Mega Dynamics is considering a project that has the following
cash flows:
Year
Project Cash Flow
0
?
1
$2,000
2
3,000
3
3,000
4
1,500
The project has an IRR of 17% . The firm's cost of capital is 11
percent. What is the project's net present value (NPV)?
A project has the following cash flows:
A project has the following cash flows:YearCash Flow0–$16,60017,30028,60037,100 a.What is the NPV at a discount rate of zero percent? (Do
not round intermediate calculations and round your
answer to the nearest whole number, e.g.,
32.)b.What is the NPV at a discount rate of 12 percent? (Do
not round intermediate calculations and round your answer to 2
decimal places, e.g., 32.16.)c.What is the NPV at a discount rate of 19 percent? (A
negative answer should be indicated by a minus sign. Do...
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