Question
In: Finance
Turner Video will invest $96,500 in a project. The firm cost of capital is 11%. the...
Turner Video will invest $96,500 in a project. The
firm cost of capital is 11%. the investment will provide the
following inflows.
year.
inflows
1.
$34000
2.
36000
3.
31000
4.
39000
5.
4300
The Internal rate of return is 12%
A. if the reinvestment assumption of net present value is use. What
will be the total value of inflows in the next five year.
B. What will be the reinvestment assumption if the Internal Rate
Return method is used?
Solutions
Expert Solution
I HAVE TAKEN LAST FIGURE AS "43000" AND NOT "4300". I
THINK ONE ZERO IS LEFT OUT. IF IT IS "4300" ONLY LET ME KNOW, WILL
CHANGE ANSWER ACCORDINGLY. THANK YOU
jeff jeffy answered 1 year agoRelated Solutions
Turner Video will invest $52,500 in a project. The firm’s cost of capital is 9 percent....
Turner Video will invest $52,500 in a project. The firm’s cost
of capital is 9 percent. The investment will provide the following
inflows. Use Appendix A for an approximate answer but calculate
your final answer using the formula and financial calculator
methods.
Year
Inflow
1
$
12,000
2
14,000
3
18,000
4
22,000
5
26,000
The internal rate of return is 12 percent.
a. If the reinvestment assumption of the net
present value method is used, what will be the...
Turner Video will invest $74,500 in a project. The firm’s cost of capital is 12 percent....
Turner Video will invest $74,500 in a project. The firm’s cost
of capital is 12 percent. The investment will provide the following
inflows. Use Appendix A for an approximate answer but calculate
your final answer using the formula and financial calculator
methods.
Year
Inflow
1
$
23,000
2
25,000
3
29,000
4
33,000
5
37,000
The internal rate of return is 15 percent.
a. If the reinvestment assumption of the net
present value method is used, what will be the...
7. Turner Video will invest $86,500 in a project. The firm’s cost of capital is 10...
7. Turner Video will invest $86,500 in a project. The firm’s
cost of capital is 10 percent. The investment will provide the
following inflows. Use Appendix A for an approximate answer but
calculate your final answer using the formula and financial
calculator methods.
Year
Inflow
1
$
29,000
2
31,000
3
35,000
4
39,000
5
43,000
The internal rate of return is 12 percent.
a. If the reinvestment assumption of the net
present value method is used, what will be...
Turner Video will invest $84,500 in a project. The firm’s cost of capital is 6 percent....
Turner Video will invest $84,500 in a project. The firm’s cost
of capital is 6 percent. The investment will provide the following
inflows. Use Appendix A for an approximate answer but calculate
your final answer using the formula and financial calculator
methods.
Year
Inflow
1
$
28,000
2
30,000
3
34,000
4
38,000
5
42,000
The internal rate of return is 12 percent.
a. If the reinvestment assumption of the net
present value method is used, what will be the...
Turner Video will invest $76,500 in a project. The firm’s cost of capital is 12 percent....
Turner Video will invest $76,500 in a project. The firm’s cost
of capital is 12 percent. The investment will provide the following
inflows. Use Appendix A for an approximate answer but calculate
your final answer using the formula and financial calculator
methods.
Year
Inflow
1
$
24,000
2
26,000
3
30,000
4
34,000
5
38,000
The internal rate of return is 13 percent.
a. If the reinvestment assumption of the net
present value method is used, what will be the...
A firm with a 13 percent cost of capital is considering a project for this year’s...
A firm with a 13 percent cost of capital is considering a
project for this year’s capital budget. The project’s expected
after-tax cash flows are as follows:
Year:
0
1
2
3
4
Cash flow:
-$8,000
$3,100
$3,000
$2,700
$3,900
Calculate the project’s discounted payback
period.
a.
3.50 years
b.
4.00 years
c.
3.43 years
d.
3.57 years
e.
3.00 years
Using a cost of capital of 11%, calculate the net present value for the project shown...
Using a cost of capital of 11%, calculate the net present
value for the project shown in the following table and indicate
whether it is acceptable,
Initial investment
(CF 0CF0)
negative $−$1149
Year
(t)
Cash inflows
(CF Subscript tCFt)
in thousands
1
$8080
2
$130
3
$189
4
$256
5
$312
6
$376
7
$280
8
$102
9
$42
10
$20
The net present value (NPV) of the project is
$-75,817.60. (Round to the nearest cent.) Is the project
acceptable?
Compute the NPV statistic for Project Y if the appropriate cost of capital is 11 percent....
Compute the NPV statistic for Project Y if the appropriate cost
of capital is 11 percent. (Negative amount should be
indicated by a minus sign. Do not round
intermediate calculations and round your final answer to 2 decimal
places.)
Project Y
Time:
0
1
2
3
4
Cash flow:
–$8,100
$3,370
$4,200
$1,540
$320
Using a cost of capital of 11%, calculate the net present value for the project shown...
Using a cost of capital of 11%, calculate the net present value
for the project shown in the following table and indicate whether
it is acceptable
Initial investment
(CF 0CF0)
-$1149
Year
(t)
Cash inflows
(CF Subscript tCFt)
in thousands
1
$80
2
$130
3
$189
4
$256
5
$312
6
$376
7
$280
8
$102
9
$42
10
$20
A firm has estimated its cost of capital as 5% and is considering a project with...
A firm has estimated its cost of capital as 5% and is
considering a project with an initial investment of -$265,000. The
subsequent cash flows are $65,000; $77,000; $83,000; $91,000; and
$96,000. In the final year (year #6), the firm must pay $50,000 to
clean up the site. Calculate the project’s MIRR using the three
methods discussed in class. Please provide timelines, a description
of all of your math, and calculator inputs.
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