In: Finance
please i need unique answer , don't copy and paste ,, don't use handwriting..
Q1. Dala Corporation is considering a project, which will involve the following cash inflows and (out) flows
|
Details |
Amount |
|
Initial Outlay |
SAR (400000) |
|
After 1 Year |
SAR 40000 |
|
After 2 Years |
SAR 300000 |
|
After 3Years |
SAR 300000 |
What will be the NPV of this project if a discount rate of 15% is used?
Answer No1:
|
Discount Rate Used |
NPV |
|
10% |
SAR 1,30,000 |
|
15% |
SAR 50,000 |
|
20% |
SAR -50,000 |
Q2.Merck Inc. is about to undertake a project and has computed the NPV of the project using a variety of discount rates
What is the approximate IRR of this project?
Answer No.2
Q3. Which are the parties involved in Bond Issuance?
Answer No.3
| Answer 1 | ||||||
| Calculation of NPV of project @ 15% discount rate | ||||||
| Year | Cash flow | Discount Factor @ 15% | Present Value | |||
| 0 | - 400,000.00 | 1 | - 400,000.00 | |||
| 1 | 40,000.00 | 0.869565 | 34,782.61 | |||
| 2 | 300,000.00 | 0.756144 | 226,843.10 | |||
| 3 | 300,000.00 | 0.657516 | 197,254.87 | |||
| NPV of the Project | 58,880.58 | |||||
| NPV of the project = SAR 58,880.58 | ||||||
| Answer 2 | ||||||
| Calculation of IRR of project | ||||||
| At IRR , the NPV of project is equal to zero. | ||||||
| Year | Cash flow | |||||
| 0 | - 400,000.00 | |||||
| 1 | 40,000.00 | |||||
| 2 | 300,000.00 | |||||
| 3 | 300,000.00 | |||||
| Approx. IRR of the project = | 21.94% | |||||
| Answer 3 | ||||||
| The following parties are involved in Bond Issuance, | ||||||
| 1 | Issuers | Government bodies or corporation | ||||
| 2 | Investors | Public | ||||
| 3 | Dealers | Investment Bankers | ||||