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In: Finance
A project is expected to create operating cash flows of $37,600 a year for 3 years....
A project is expected to create operating cash flows of $37,600 a year for 3 years. The initial cost of the fixed assets is $98,000. These assets will be worthless at the end of the project. Also, $3,200 of net working capital will be required throughout the life of the project. What is the project's net present value if the required rate of retum is 14 percent?
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jeff jeffy answered 1 year agoRelated Solutions
A project is expected to create operating cash flows of $37,600 a year for 3 years....
A project is expected to create operating cash flows of $37,600
a year for 3 years. The initial cost of the fixed assets is
$98,000. These assets will be worthless at the end of the project.
Also, $3,200 of net working capital will be required throughout the
life of the project. What is the project's net present value if the
required rate of return is 14 percent?
An office building is expected to create operating cash flows of $26,500 a year for three...
An office building is expected to create operating cash flows of
$26,500 a year for three years, based on tenants' rental income.
The purchase of the fixed assets for this building will cost
$55,000. These assets will have no value at the end of the project.
An additional $5,000 of net working capital will be required
throughout the life of the project. Calculate the net present value
of this project if the required rate of return is 15 percent?
Multiple...
Project X is expected to generate cash flows of $5,000 per year for 5 years and...
Project X is expected to generate cash flows of $5,000 per year
for 5 years and its initial cost is $17,000. Project Y is mutually
exclusive to Project S. Project Y costs $30,000, and its expected
cash flows would be $8,750 per year for 5 years. If both projects
have a WACC of 12%, what is the IRR of the better project?
a)12.00%
b)14.85%
c)13.65%
d)14.05%
e)14.40%
A project has expected cash flows of $55 next year (year 1). These cash flows will...
A project has expected cash flows of $55 next year (year 1).
These cash flows will grow at 6% per year through year 6. Growth
from year 6 to 7 will be -2%, and this negative growth will
continue in perpetuity. Assume a discount rate of 8%. What is the
present value today (year 0) of these cash flows? DO BY HAND
Gio's Restaurants is considering a project with the following expected cash flows: Year Project Cash Flow...
Gio's Restaurants is considering a project with the following
expected cash flows:
Year
Project Cash Flow (millions)
0
$(180)
1
80
2
75
3
80
4
95
If the project's appropriate discount rate is 12 percent, what
is the project's discounted payback period?
The project's discounted payback period is ___
years.
A project will have annual operating cash flows of $30,900 for four years. At the beginning...
A project will have annual operating cash flows of $30,900 for
four years. At the beginning of the project, net working capital of
$103,600 will be needed. Only $17,150 of this amount will be
recovered at the end. Ignoring taxes, what is the project's NPV if
the required return is 6.50%?
Question 15 options: $14,029
$14,419
$14,809
$15,199
$15,588
A new molding machine is expected to produce operating cash flows of $109,000 a year for...
A new molding machine is expected to produce operating cash
flows of $109,000 a year for 4 years. At the beginning of the
project, inventory will decrease by $8,700, accounts receivables
will increase by $9,500, and accounts payable will decrease by
$5,200. All net working capital will be recovered at the end of the
project. The initial cost of the molding machine is $319,000. The
equipment will be depreciated straight-line to a zero book value
over the life of the...
A project that will last for 9 years is expected to have equal annual cash flows...
A project that will last for 9 years is expected to have equal
annual cash flows of $100,000. If the required return is 8.3
percent, what maximum initial investment would make the project
acceptable?
Project S costs $18,000 and its expected cash flows would be $4,000 per year for 5 years
CAPITAL BUDGETING CRITERIA: MUTUALLY EXCLUSIVE PROJECTS
Project S costs $18,000 and its expected cash flows would be
$4,000 per year for 5 years. Mutually exclusive Project L costs
$26,000 and its expected cash flows would be $11,100 per year for 5
years. If both projects have a WACC of 13%, which project would you
recommend? Select the correct answer.
a. Neither Project S nor L, since each project's NPV < 0.
b. Project S, since the NPVS > NPVL.
c....
A company is considering a project with the following expected cash flows: Year 0: -$685,000 Year...
A company is considering a project with the following expected
cash flows:
Year 0: -$685,000
Year 1: $305,000
Year 2: $305,000
Year 3: $305,000
The company requires a 15% return on investment. Compute the NPV
for the project.
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