Town Inc is considering investing in a project with the following expected cash flows: -111, 12,...

Town Inc is considering investing in a project with the following expected cash flows: -111, 12, 26, 33. If Town Inc expected cost of capital is 0.18, what is the expected NPV of the project?

Expert Solution

Ans -$62.07 (Negative)

Year	Project Cash Flows (i)	DF@ 18%	DF@ 18% (ii)	PV of Project A ( (i) * (ii) )
0	-111	1	1	(111.00)
1	12	1/((1+18%)^1)	0.847	10.17
2	26	1/((1+18%)^2)	0.718	18.67
3	33	1/((1+18%)^3)	0.609	20.08
		NPV		(62.07)

jeff jeffy answered 6 months ago

Silky Smooth Studio (SMS) is considering investing in a movie project. The expected cash flows of...

Silky Smooth Studio (SMS) is considering investing in a movie project. The expected cash flows of the project are given in the table below. Year 0 1 2 3 Cash Flow -$100,000 $45,000 $45,000 $45,000 The required return of the project is 12 percent. Using Net Present Value as the decision criterion, should SMS invest in this movie? Explain carefully. What is the discounted payback period of this project?

A firm is considering investing in a project with the following cash flows: Year 1 2...

A firm is considering investing in a project with the following cash flows: Year 1 2 3 4 5 6 7 8 Cash flow (OMR) 1,000 1,500 2,000 1,750 1,500 1,000 1,000 500 The initial investment is OMR 7,250. The firm has a required rate of return of 8 per cent. Calculate: The payback period; The discounted payback; The net present value.

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.

Gio's Restaurants is considering a project with the following expected cash flows: . If the project's...

Gio's Restaurants is considering a project with the following expected cash flows: . If the project's appropriate discount rate is 11 percent, what is the project's discounted payback period? YEAR PROJECT CASH FLOW 0 −$240240 million 1 100100 million 2 6060 million 3 100100 million 4 100100 million

. Suppose your firm is considering investing in a project with the cash flows shown as...

. Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistic for the project are three and three and a half years, respectively. Time 0 1 2 3 4 5 Cashflow -100,000 30,000 45,000 55,000 30,000 10,000 Calculate the payback and use the payback decision rule to evaluate this...

Gio's Restaurants is considering a project with the following expected cash flows: LOADING.... If the project's...

Gio's Restaurants is considering a project with the following expected cash flows: LOADING.... If the project's appropriate discount rate is 11 percent, what is the project's discounted payback period? YEAR PROJECT CASH FLOW 0 $210 million 1 90 million 2 60 million 3 85 million 4 100 million

firm is considering a project with the following expected cash flows: Year Cash Flow 0 -P350...

firm is considering a project with the following expected cash flows: Year Cash Flow 0 -P350 million 1 100 million 2 185 million 3 112.5 million 4 350 million The project’s WACC is 10 percent. What is the project’s discounted payback? a. 3.15 years b. 4.09 years c. 1.62 years d. 3.09 years The lolo Corporation has been presented with an investment opportunity that will yield end-of-year cash flows of $30,000 per year in Years 1 through 4, $35,000 per...

You are considering a project with an initial cash outlay of $72,000 and expected cash flows...

You are considering a project with an initial cash outlay of $72,000 and expected cash flows of $22,320 at the end of each year for six years. The discount rate for this project is 10.5 percent. a. What are the project's payback and discounted payback periods? b. What is the project's NPV? c. What is the project's PI? d. What is the project's IRR? a. The payback period of the project is nothing years.

You are considering a project with an initial cash outlay of $87000 and expected cash flows...

You are considering a project with an initial cash outlay of $87000 and expected cash flows of $23490 at the end of each year for six years. The discount rate for this project is 10.1 percent. a. What are the project's payback and discounted payback periods? b. What is the project's NPV? c. What is the project's PI? d. What is the project's IRR?

Suppose your firm is considering investing in a project with the cash flows shown below, that...

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent. Time: 0 1 2 3 4 5 6 Cash flow: –$8,600 $1,080 $2,280 $1,480 $1,480 $1,280 $1,080 Use the IRR decision rule to evaluate this project. (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.) IRR%= Should it be accepted or rejected?

Question