Rossdale Flowers has a new greenhouse project with an initial cost of $286,300 that is expected...

Rossdale Flowers has a new greenhouse project with an initial cost of $286,300 that is expected to generate cash flows of $47,900 for 7 years and a cash flow of $63,300 in Year 8. If the required return is 8.7 percent, what is the project's NPV?

$94,708.08
$67,994.70
−$18,200.22
−$10,299.17
$14,276.14

Expert Solution

Ans −$10,299.17

Year	Project Cash Flows (i)	DF@ 8.7%	DF@ 8.7% (ii)	PV of Project A ( (i) * (ii) )
0	-286300	1	1	(2,86,300.00)
1	47900	1/((1+8.7%)^1)	0.920	44,066.24
2	47900	1/((1+8.7%)^2)	0.846	40,539.32
3	47900	1/((1+8.7%)^3)	0.779	37,294.68
4	47900	1/((1+8.7%)^4)	0.716	34,309.73
5	47900	1/((1+8.7%)^5)	0.659	31,563.69
6	47900	1/((1+8.7%)^6)	0.606	29,037.43
7	47900	1/((1+8.7%)^7)	0.558	26,713.37
8	63300	1/((1+8.7%)^8)	0.513	32,476.36
		TOTAL		(10,299.17)

jeff jeffy answered 2 years ago

rossdale flower has a new greenhouse project with a initial cost of$319,500 that is expected to...

rossdale flower has a new greenhouse project with a initial cost of$319,500 that is expected to generate cashflow of $45,900 for 9 years and a cashflow of $61,300 in year 10. if the required return is 8.3 percent, what is the project NPV?

A project has an initial cost of $148,400 and is expected to produce cash inflows of...

A project has an initial cost of $148,400 and is expected to produce cash inflows of $56,500, $69,540, and $97,867 over the next three years, respectively. What is the discounted payback period if the required rate of return is 10 percent? A. 2.12 years B. 2.54 years C. 2.91 years D. 1.88 years

A project has an initial cost of $1,000,000 and is expected to last for 2 years....

A project has an initial cost of $1,000,000 and is expected to last for 2 years. In year 1, depreciation charge will be $100,000 and earnings are expected to be $164,747. In year 2, depreciation will be $100,000 and earnings are expected to be $208,905. Assume the required return is 8%. What is the value of this project?

You are analyzing a project with an initial cost of £48,000. The project is expected to...

You are analyzing a project with an initial cost of £48,000. The project is expected to return £11,000 the first year, £36,000 the second year and £38,000 the third and final year. There is no salvage value. The current spot rate is £0.6211. The nominal return relevant to the project is 12 percent in the U.S. The nominal risk-free rate in the U.S. is 4 percent while it is 5 percent in the U.K. Assume that uncovered interest rate parity...

A project has an initial cost of $ 42,000, expected net cash inflows of $ 9,000...

A project has an initial cost of $ 42,000, expected net cash inflows of $ 9,000 per year for 7 years, and a cost of capital of 12%. What is the project’s NPV ? Please show the steps of your work.

Part A A new project has an initial cost of $142,000. The equipment will be depreciated...

Part A A new project has an initial cost of $142,000. The equipment will be depreciated on a straight-line basis to a book value of $45,000 at the end of the four-year life of the project. The projected net income each year is $14,300, $17,600, $22,400, and $14,200, respectively. What is the average accounting return? Part B You are evaluating two projects with the following cash flows: Year Project X Project Y 0 −$540,600 −$511,000 1 219,700 209,400 2 229,600...

A) A project has an initial cost of $51,125, expected net cash inflows of $14,000 per...

A) A project has an initial cost of $51,125, expected net cash inflows of $14,000 per year for 11 years, and a cost of capital of 14%. What is the project's MIRR? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to two decimal places. B)A project has an initial cost of $70,350, expected net cash inflows of $11,000 per year for 10 years, and a cost of capital of 11%. What is the...

An expansion project being considered by your firm has an initial cost of $8,000,000 and expected...

An expansion project being considered by your firm has an initial cost of $8,000,000 and expected net cash flows of $1,500,000 per year for the first 2 years, 1,800,000 for the third and fourth years, and $1,900,000 per year for the fifth and sixth years. All cash flows will occur at the end of each year. Assume that the project will be terminated at the end of the sixth year. Your firm’s cost of capital is 11%. Calculate the Net...

1 A project has an initial cost of $ 320,000, expected after-tax cash inflows of $...

1 A project has an initial cost of $ 320,000, expected after-tax cash inflows of $ 75,000 per year for 8 years, a net salvage value of $ 30,000, and a cost of capital of 11%. a) What is the project's net present value? b) What is the project's profitability index? c) What is the project's internal rate of return? d) What is the project's modified internal rate of return (assume the investment rate to be equal to the cost...

Part A: A project has an initial cost of $60,025, expected net cash inflows of $11,000...

Part A: A project has an initial cost of $60,025, expected net cash inflows of $11,000 per year for 11 years, and a cost of capital of 14%. What is the project's PI? Do not round your intermediate calculations. Round your answer to two decimal places. Part B: A project has an initial cost of $35,000, expected net cash inflows of $14,000 per year for 10 years, and a cost of capital of 11%. What is the project's MIRR? Do...

Question