Question

In: Finance

Suppose you are considering an investment that will generate equal annual cash flow of $200,000 over...

Suppose you are considering an investment that will generate equal annual cash flow of $200,000 over its 10-year life, resulting in an IRR of 14% and a Profitability index of 1.05. What is this investment's NVP?

Solutions

Expert Solution


Related Solutions

An investment is expected to generate annual cash flows forever. The first annual cash flow is...
An investment is expected to generate annual cash flows forever. The first annual cash flow is expected in 1 year and all subsequent annual cash flows are expected to grow at a constant rate annually. We know that the cash flow expected in 3 years from today is expected to be $9,000 and the cash flow expected in 7 years from today is expected to be $10,000. What is the cash flow expected to be in 5 years from today?
An investment is expected to generate annual cash flows forever. The first annual cash flow is...
An investment is expected to generate annual cash flows forever. The first annual cash flow is expected in 1 year and all subsequent annual cash flows are expected to grow at a constant rate annually. We know that the cash flow expected in 2 year(s) from today is expected to be 1,860 dollars and the cash flow expected in 8 years from today is expected to be 3,140 dollars. What is the cash flow expected to be in 5 years...
You are considering a project with an initial investment of $14 million and annual cash flow...
You are considering a project with an initial investment of $14 million and annual cash flow (before interest and taxes) of $2,000,000. The project’s cash flow is expected to continue forever. The tax rate is 34%, the firm’s unlevered cost of equity is 12% and its pre-tax cost of debt is 10%. The only side-effect from the use of debt that you are concerned about is related to the tax shield. If the project were to be financed with 100%...
Your company is considering a capital investment of ​$212.469 million. The project will generate equal annual​...
Your company is considering a capital investment of ​$212.469 million. The project will generate equal annual​ after-tax operating cash flows of ​$36.79 million for 7 years. At the end of its​ life, the project will be sold for ​$37 ​million, but the​ project's adjusted tax basis at termination will be ​$31 million. The project will require ​$16 million in additonal net working capital. With a 27​% marginal tax​ rate, what is the​ project's IRR? ​ (Percent with​ 1decimal)
annual cash flow, -500,000 125,000 150,000 175,000 200,000 250,000 What is the IRR of the investment
annual cash flow, -500,000 125,000 150,000 175,000 200,000 250,000 What is the IRR of the investment
You want to save sufficient funds to generate an annual cash flow of $55,000 a year...
You want to save sufficient funds to generate an annual cash flow of $55,000 a year for 25 years as retirement income. You currently have no retirement savings but plan to save an equal amount each year for the next 38 years until your retirement. How much do you need to save each year if you can earn 7.5 percent on your savings?
A project is expected to generate cash flow from assets equal to $250,000 at the end...
A project is expected to generate cash flow from assets equal to $250,000 at the end of the year. The cash flows are expected to grow at 4% for the next 20 years. At the end of the 20 years, the project will no longer be viable, but the company will be able to sell off related equipment at an after tax salvage value of $1,000,000. The cost of capital for this project is 8%. The company is considering selling...
A project is expected to generate cash flow from assets equal to $250,000 at the end...
A project is expected to generate cash flow from assets equal to $250,000 at the end of the year. The cash flows are expected to grow at 4% for the next 20 years. At the end of the 20 years, the project will no longer be viable, but the company will be able to sell off related equipment at an after tax salvage value of $1,000,000. The cost of capital for this project is 8%. The company is considering selling...
Suppose you are considering a project that will generate quarterly cash flows of $16429 at the...
Suppose you are considering a project that will generate quarterly cash flows of $16429 at the beginning of each quarter for the next 12 years. If the appropriate discount rate for this project is 12%, how much is this project worth today? Round to the nearest cent.
Suppose you are considering a project that will generate quarterly cash flows of $17143 at the...
Suppose you are considering a project that will generate quarterly cash flows of $17143 at the beginning of each quarter for the next 11 years. If the appropriate discount rate for this project is 13%, how much is this project worth today? Round to the nearest cent.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT