Question
In: Finance
Tamarisk Inc. now has the following two projects available: Project Initial CF After-tax CF1 After-tax CF2...
Tamarisk Inc. now has the following two projects available:
| Project | Initial CF | After-tax CF1 | After-tax CF2 | After-tax CF3 | |||||
| 1 | -11,119 | 5,050 | 5,825 | 9,100 | |||||
| 2 | -3,104 | 3,550 | 2,950 |
Assume that RF = 4.6%, market risk premium = 10.1%, and beta = 1.3. Use the EANPV approach to determine which project(s) Tamarisk Inc. should choose if they are mutually exclusive. (Round cost of capital to 2 decimal places, e.g.17.35% and the final answers to 0 decimal places, e.g. 2,513.)
| PMT1 | $
|
||
| PMT2 | $
|
Solutions
Expert Solution
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jeff jeffy answered 2 years agoRelated Solutions
Your company is considering the following three projects. CF0 CF1 CF2 CF3 CF4 Project Whiskey -100...
Your company is considering the following three projects.
CF0 CF1 CF2 CF3 CF4
Project Whiskey -100 80 20 80 20
Project Tango -100 20 80 20 80
Project Foxtrot -100 50 50 50 50
1) What is Project Foxtrot’s MIRR? And, should the project be
accepted if we used MIRR as the basis of decision? Assume that the
cost of capital is 8%. Show your calculator inputs (CF0=?, CF1=?,
CF2=?, CF3=?, CF4=?, etc.) to receive full credit.
2) What is...
There is a project with the following cash flows: CF0 = -850; CF1 = 300; CF2...
There is a project with the following cash flows: CF0 = -850;
CF1 = 300; CF2 =320; CF3 = 340; CF4 = 360. If the appropriate
discount rate is 10%, what is the project's MIRR? (Assume the same
reinvestment rate)
14.08%
15.65%
17.21%
18.29%
19.15%
A potential CB project has the following cash flows: CF0 = -$500, CF1 = $300, CF2...
A potential CB project has the following cash flows: CF0 =
-$500, CF1 = $300, CF2 = $200, CF3 = $150. WACC = 6%. Compute the
following:
A. Payback Period
B. NPV
C. IRR
1. Me Online, Inc. is considering a project that has an initial after-tax outlay or after-tax...
1. Me Online, Inc. is considering a project that has an
initial after-tax outlay or after-tax cost of $220,000. The
respective future cash inflows from its four-year project for years
1 through 4 are: $50,000, $60,000, $70,000 and $80,000. Sportswear
Online uses the net present value method and has a discount rate of
11%. Will Sportswear Online accept the project?
a. Me Online rejects the project because the NPV is about
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b. Me Online accepts the project because the...
There are two projects: Project A and Project B a. Project A: CF0 = -6000; CF1-5...
There are two projects:
Project A and Project B
a. Project A: CF0 = -6000; CF1-5 = 2000; I/YR = 14. Calculate
NPV, IRR, MIRR, Payback period, and discounted payback period for
Project A.
Project B: CF0 = -18000; CF1-5 = 5600; I/YR = 14. Calculate NPV,
IRR, MIRR, Payback period, and discounted payback period for
Project B.
b. If the two projects are independent, which project(s) would
be accepted?
c. If the two projects are mutually exclusive, which project...
Seether, Inc., has the following two mutually exclusive projects available. Year Project R Project S 0...
Seether, Inc., has the following two mutually exclusive projects
available.
Year
Project R
Project S
0
–$
55,000
–$
76,000
1
21,000
20,000
2
22,000
20,000
3
19,000
35,000
4
12,000
30,000
5
9,000
10,000
Requirement
1:
What is the crossover rate for these two projects?
(Do not round intermediate
calculations. Enter your answer as a percentage
rounded to 2 decimal places (e.g.,
32.16).)
Internal rate of
return
%
Requirement
2:
What is the NPV of each project at...
Seether, Inc., has the following two mutually exclusive projects available. Year Project R Project S 0...
Seether, Inc., has the following two mutually exclusive projects
available.
Year
Project R
Project S
0
–$
80,500
–$
100,400
1
28,200
25,100
2
27,200
25,100
3
25,200
40,100
4
19,200
35,100
5
10,900
14,100
What is the crossover rate for these two projects? (Do
not round intermediate calculations and enter your answer as a
percent rounded to 2 decimal places, e.g., 32.16.)
Crossover rate
%
What is the NPV of each project at the crossover...
Company has the following cash flow stream. CF1 = 357 CF2 = 653 CF3 = 804...
Company has the following cash flow stream.
CF1 = 357
CF2 = 653
CF3 = 804
CF4 = 963
Cash flow is expected to be constant after year 4, with a growth
rate of 4%. If the WACC is 10%, what is the Value of Operations
(Firm Value) - Vop0 today?
(Hint : The answer in my version is 14,370.44
Company has the following cash flow stream. CF1 = 408 CF2 = 634 CF3 = 916...
Company has the following cash flow stream.
CF1 = 408
CF2 = 634
CF3 = 916
Cash flow is expected to be constant after year 3, with a growth
rate of 4%. If the WACC is 10%, what is the Value of Operations
(Firm Value) - Vop0 today?
Company has the following cash flow stream. CF1 = 402 CF2 = 602 CF3 = 988...
Company has the following cash flow stream.
CF1 = 402
CF2 = 602
CF3 = 988
Cash flow is expected to be constant after year 3, with a growth
rate of 4%. The WACC is 10%. In addition, the company has 21
millions in cash, and 52 millions debt, with 17 millions shares
outstanding. What is the stock price, P0 , toda
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