Question
In: Finance
You are considering a project with an initial cash outlay of $ 85,000 and expected free...
You are considering a project with an initial cash outlay of $ 85,000 and expected free cash flows of $ 28,000 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?
Solutions
Expert Solution
Calculate the payback period, NPV, PI and IRR as follows:
Formulas:
jeff jeffy answered 1 year agoRelated Solutions
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projects is 10%. The expected annual free cash flows from each
project are as follows:
Year
Project A
Project B
0
- 60,000
-80,000
1
13,000
15,000
2
13,000
15,000
3
13,000
15,000
4
13,000
15,000
5
13,000
15,000
6...
Given the following free cash flows, PROJECT A PROJECT B PROJECT C Initial outlay -70,000 ...
Given the following free cash flows,
PROJECT A PROJECT B PROJECT
C
Initial outlay -70,000 -140,000
-450,000
Cash inflows:
Year 1 12,000 120,000 220,000
Year 2 18,000 30,000 220,000
Year 3 22,000 30,000 220,000
Year 4 28,000 30,000 --------
Year 5 32,000 30,000 ---------
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What is the IRR of project B?
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determine the IRR for the three independent projects A, B, and
C
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