Question

In: Finance

Problem 11-4 Payback period Project L costs $75,000, its expected cash inflows are $14,000 per year...

Problem 11-4 Payback period Project L costs $75,000, its expected cash inflows are $14,000 per year for 7 years, and its WACC is 14%. What is the project's payback? Round your answer to two decimal places. years

Solutions

Expert Solution

Payback = 5.36 years

Payback = Year in which Cumulative CF is last negative -(Last negative cumulative CF/ CF of next year
= 5 - (-5000/14000)

=5.36 years

WORKINGS

Year Cash flows Cumulative CF
0 -75000 -75000
1 14000 -61000
2 14000 -47000
3 14000 -33000
4 14000 -19000
5 14000 -5000
6 14000 9000
7 14000 23000


Related Solutions

PAYBACK PERIOD Project L costs $65,000, its expected cash inflows are $14,000 per year for 11...
PAYBACK PERIOD Project L costs $65,000, its expected cash inflows are $14,000 per year for 11 years, and its WACC is 9%. What is the project's payback? Round your answer to two decimal places. __ years
Payback period A) Project L costs $60,000, its expected cash inflows are $13,000 per year for...
Payback period A) Project L costs $60,000, its expected cash inflows are $13,000 per year for 12 years, and its WACC is 9%. What is the project's payback? Round your answer to two decimal places. B) A project has annual cash flows of $6,000 for the next 10 years and then $9,500 each year for the following 10 years. The IRR of this 20-year project is 13.03%. If the firm's WACC is 8%, what is the project's NPV? Round your...
PAYBACK PERIOD Project L costs $55,000, its expected cash inflows are $12,000 per year for 8...
PAYBACK PERIOD Project L costs $55,000, its expected cash inflows are $12,000 per year for 8 years, and its WACC is 10%. What is the project's payback? Round your answer to two decimal places. years
Project L costs $75,000, its expected cash inflows are $9,000 per year for 8 years, and...
Project L costs $75,000, its expected cash inflows are $9,000 per year for 8 years, and its WACC is 13%. What is the project's MIRR? Do not round intermediate calculations. Round your answer to two decimal places.
Project L costs $67,539.42, its expected cash inflows are $14,000 per year for 10 years, and...
Project L costs $67,539.42, its expected cash inflows are $14,000 per year for 10 years, and its WACC is 9%. What is the project's IRR? Round your answer to two decimal places.   %
Project L costs $65,458.38, its expected cash inflows are $14,000 per year for 10 years, and...
Project L costs $65,458.38, its expected cash inflows are $14,000 per year for 10 years, and its WACC is 11%. What is the project's IRR? Round your answer to two decimal places.
Project L costs $50,000, its expected cash inflows are $14,000 per year for 12 years, and...
Project L costs $50,000, its expected cash inflows are $14,000 per year for 12 years, and its WACC is 14%. What is the project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. $
Project L costs $65,000, its expected cash inflows are $14,000 per year for 8 years, and...
Project L costs $65,000, its expected cash inflows are $14,000 per year for 8 years, and its WACC is 14%. What is the project's payback? Round your answer to two decimal places.
2.Project L costs $65,978.46, its expected cash inflows are $14,000 per year for 9 years, and...
2.Project L costs $65,978.46, its expected cash inflows are $14,000 per year for 9 years, and its WACC is 12%. What is the project's IRR? Round your answer to two decimal places.
1. Project L costs $35,000, its expected cash inflows are $14,000 per year for 8 years,...
1. Project L costs $35,000, its expected cash inflows are $14,000 per year for 8 years, and its WACC is 9%. What is the project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. 2. Project L costs $71,242.75, its expected cash inflows are $14,000 per year for 11 years, and its WACC is 14%. What is the project's IRR? Round your answer to two decimal places. 3. Project L costs $40,000, its expected cash...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT