Question

In: Finance

A. What is the NPV of the following cash flows if the required rate of return...

A. What is the NPV of the following cash flows if the required rate of return is 0.05?

Year 0 1 2 3 4

CF -13868 2129 2503 694 3244   

Enter the answer with 2 decimals (e.g. 1000.23).

B. Winnebagel Corp. currently sells 39298 motor homes per year at $59840 each, and 17359 luxury motor coaches per year at $116566 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 16596 of these campers per year at $16773 each. An independent consultant has determined that if Winnebagel introduces the new campers, it should boost the sales of its existing motor homes by 4933 units per year, and reduce the sales of its motor coaches by 1743 units per year. What is the amount to use as the annual sales figure when evaluating this project?

Solutions

Expert Solution

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

​(NPVcalculation​)Calculate the NPV given the following free cash​ flows, if the appropriate required rate of return...
​(NPVcalculation​)Calculate the NPV given the following free cash​ flows, if the appropriate required rate of return is 8 percent. Should the project be​ accepted? YEARCASH FLOW    0 −​$90,000    1      10,000    2      10,000    3      15,000    4      15,000    5      30,000    6      30,000 MIRRcalculation​)Calculate the MIRR given the following free cash​ flows if the appropriate required rate of return is 12 percent​ (use this as the reinvestment​rate). Should the project be​ accepted? YEAR   CASH FLOWS 0   -50,000 1   35,000 2   35,000 3   35,000...
The NPV of a series of cash flows is the following: At a 5% required rate...
The NPV of a series of cash flows is the following: At a 5% required rate of return, the NPV is $41,728 At a 10% required rate of return, the NPV is $24,708 At a 15% required rate of return, the NPV is $9,940 At a 20% required rate of return, the NPV is -$2,968 (note the negative sign) The IRR for the series of cash flows is in which range: Multiple Choice 0% to 5% Between 5% and 10%...
Calculate the NPV for a 3-year project with the following cash flows and a required return...
Calculate the NPV for a 3-year project with the following cash flows and a required return of 15%: CF0 = -$800,000 ATCF1 = $160,000 ATCF2 = $160,000 ATCF3 = $160,000 ATER = $600,000 Calculate the IRR for a 2-year project with the following cash flows and a required return of 12%: CFO = -$375,000 ATCF1 = $27,500 ATCF2 = -$134,800 ATER = $596,000 ATER = After-Tax Equity Reversion ATCF = After-Tac Cash Flow Please show me how you answer the...
What is the role that the required rate of return plays in the NPV model? In...
What is the role that the required rate of return plays in the NPV model? In the IRR model? Consider some real-life example situations where NPV and IRR should be applied and why rate of return is so important.
1A) What is the discount rate at which the following cash flows have a NPV of...
1A) What is the discount rate at which the following cash flows have a NPV of $0? Answer in %, rounding to 2 decimals. Year 0 cash flow = -158,000 Year 1 cash flow = 30,000 Year 2 cash flow = 36,000 Year 3 cash flow = 38,000 Year 4 cash flow = 39,000 Year 5 cash flow = 43,000 Year 6 cash flow = 42,000 1B) Your firm is evaluating a capital budgeting project. The estimated cash flows appear...
1A) What is the discount rate at which the following cash flows have a NPV of...
1A) What is the discount rate at which the following cash flows have a NPV of $0? Answer in %, rounding to 2 decimals. Year 0 cash flow = -149,000 Year 1 cash flow = 39,000 Year 2 cash flow = 30,000 Year 3 cash flow = 40,000 Year 4 cash flow = 30,000 Year 5 cash flow = 41,000 Year 6 cash flow = 37,000 1B) What is the discounted payback period on Versace's proposed investment in a new...
What is the internal rate of return (IRR) on an investment with the following cash flows?...
What is the internal rate of return (IRR) on an investment with the following cash flows? Holding period 5 years. Round your answer to nearest 0.25%. Please show work (NO EXCEL) Year Net Income Purchase Price $4,000,000 1 $250,000 2 $300,000 3 $350,000 4 $400,000 5 $450,000 Resale $4,750,000 (net of costs)
You are informed that the effective annual required rate of return is 10%. Cash flows for...
You are informed that the effective annual required rate of return is 10%. Cash flows for the projects are indicated in the table below (in thousands of dollars): Year 0 1 2 3 A -1,800 600 1,00 1,200 B 12,000 -600   -10,800 -5,000 For the following problems, show all your work (i.e. express al formulas used with values in place of variables). a) Consider Project A and Project B independent projects. Calculate the internal rate of return (IRR) for Project...
A project generates cash flows of $125k, $125k, and $95k. The required rate of return is...
A project generates cash flows of $125k, $125k, and $95k. The required rate of return is 10%. The value of the project or “asset” is $288,317. Given your answer, which ones are true. IRR = 10% PI = 1.0 NPV = 0
What is the internal rate of return (IRR) of this project given the following cash flows?...
What is the internal rate of return (IRR) of this project given the following cash flows? Year                 CF 0                -$9,800 1                   $1,000 2                   $4,500 3                   $1,000 4                   $1,500 5                   $1,700 6                   $2,700 Convert your answer to percentage and round off to two decimal points. Do not enter % in the answer box.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT