Question
In: Finance
Calculate NPV and Payback Period given: $142,000 initial cost payments of $10,000 a month for 5...
Calculate NPV and Payback Period given:
$142,000 initial cost
payments of $10,000 a month for 5 years
5 year salvage value is $40,000
The
discount rate to be used is 7%
Solutions
jeff jeffy answered 1 year agoRelated Solutions
5. The NPV and payback period What information does the payback period provide? Suppose you are...
5. The NPV and payback period
What information does the payback period provide?
Suppose you are evaluating a project with the expected future
cash inflows shown in the following table. Your boss has asked you
to calculate the project’s net present value (NPV). You don’t know
the project’s initial cost, but you do know the project’s regular,
or conventional, payback period is 2.50 years.
Year
Cash Flow
Year 1
$275,000
Year 2
$450,000
Year 3
$425,000
Year 4
$450,000
If...
5. The NPV and payback period Part A What information does the payback period provide? Suppose...
5. The NPV and payback period
Part A
What information does the payback period provide?
Suppose Acme Manufacturing corp CFO is evaluating a project w
the following cash Inflows. She does not know the project's initial
cost; however he does know that the projects regular payback period
is 2.5 years.
Year Cash flow
1. $350,000
2. $400,000
3. $400,000
4. $400,000
If the project's weighted average cost of capital (WACC) is 10%,
what is its NPV?
answer options: $326,990; $299,741;...
Calculate the Payback Period and Discounted Payback Period for the following project: 1. An initial investment...
Calculate the Payback Period and Discounted Payback
Period for the following project:
1. An initial investment of $20,000 with expected after-tax
operating cash flows of $125,000 per year for each of the
next 3 years. However, in preparation for its
termination at the end of year 3, an additional investment of
$350,000 must be made at the end of Year 2.
Please show all work in excel.
5. The NPV and payback period What information does the payback period provide? Suppose Omni Consumer...
5. The NPV and payback period
What information does the payback period provide?
Suppose Omni Consumer Products’s CFO is evaluating a project
with the following cash inflows. She does not know the project’s
initial cost; however, she does know that the project’s regular
payback period is 2.5 years.
Year
Cash Flow
Year 1
$350,000
Year 2
$500,000
Year 3
$500,000
Year 4
$450,000
If the project’s weighted average cost of capital (WACC)
is 7%, what is its NPV?
$415,274
$394,510...
. For each project, calculate the NPV, IRR, profitability index (PI) and the payback period. For...
. For each project, calculate the NPV, IRR, profitability index
(PI) and the payback period. For each capital budgeting decision
tool, indicate if the project should be accepted or rejected,
assuming that each project is independent of the others. Important
Note: The venture capital folks have a firm maximum payback
period of four
years.
Project A= Required rate of Return=
16.30%
Project B= R= 12.50%
Project C= R= 15.35%
Project D= R= 17.25%
Expected cash flows for the four...
Problem #4 Calculate NPV, Payback, Discounted Payback, IRR and Modified IRR for the following project Initial...
Problem #4
Calculate NPV, Payback, Discounted Payback, IRR and Modified IRR
for the following project
Initial Investment: -100,000
Annual project cash flow 22,000 for 6 years
Cost of capital is 6%
(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash...
(Payback
period, NPV, PI, and IRR
calculations)
You are considering a project with an initial cash outlay of
$90,000
and expected free cash flows of
$28,000
at the end of each year for
5
years. The required rate of return for this project is
6
percent.
a. What is the project's payback period?
b. What is the project's
NPV?
c. What is the project's
PI?
d. What is the project's
IRR?
(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash...
(Payback period, NPV, PI, and IRR calculations) You are
considering a project with an initial cash outlay of $80000 and
expected free cash flows of $25000 at the end of each year for 6
years. The required rate of return for this project is 9
percent.
a. What is the project's payback period?
b. What is the project's NPV?
c. What is the project's PI?
d. What is the project's IRR?
(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash...
(Payback period, NPV, PI, and IRR calculations) You are
considering a project with an initial cash outlay of $70,000 and
expected free cash flows of $28,000 at the end of each year for 5
years. The required rate of return for this project is 8
percent.
a. What is the project's payback period?
b. What is the project's NPV?
c. What is the project's PI?
d. What is the project's IRR?
(Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash...
(Payback period, NPV, PI, and IRR calculations) You are
considering a project with an initial cash outlay of $90,000 and
expected free cash flows of $22,000 at the end of each year for 7
years. The required rate of return for this project is 9
percent.
a. What is the project's payback period?
b. What is the project's NPV?
c. What is the project's PI?
d. What is the project's IRR?
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