Question

In: Finance

You are evaluating a project that costs $69,000 today. The project has an inflow of $148,000...

You are evaluating a project that costs $69,000 today. The project has an inflow of $148,000 in one year and an outflow of $59,000 in two years.

What are the IRRs for the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

  

IRR
  Smallest %
  Largest %

  

What discount rate results in the maximum NPV for this project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

  

  IRR %

Solutions

Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

Please note: Excel solver used to calculate Discount rate for Maximum NPV of Project.

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

You are evaluating a project that costs $61,000 today. The project has an inflow of $132,000...
You are evaluating a project that costs $61,000 today. The project has an inflow of $132,000 in one year and an outflow of $51,000 in two years. What are the IRRs for the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)    IRR   Smallest %   Largest %    What discount rate results in the maximum NPV for this...
You are evaluating a project that costs $67,000 today. The project has an inflow of $144,000...
You are evaluating a project that costs $67,000 today. The project has an inflow of $144,000 in one year and an outflow of $57,000 in two years. What are the IRRs for the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)    IRR   Smallest %   Largest % What discount rate results in the maximum NPV for this project?
Suppose a project costs $50,000 today and it is projected to generate a single inflow of...
Suppose a project costs $50,000 today and it is projected to generate a single inflow of $65,000 in two years. What is this project's IRR? Answer in percent, rounded to two decimal places.
1. A project costs $10 million today. Next year (year 1) the cash inflow will be...
1. A project costs $10 million today. Next year (year 1) the cash inflow will be either $10 million or $2 million with equal probability. If the year-1 cash inflow was $10 million, then the year-2 cash flow will also be $10 million. If the year-1 cash inflow was $2 million, then the year-2 cash flow will also be $2 million. If the firm can abandon the project ONLY after year 1 for a known amount of $3 million at...
You are evaluating a project that costs $530,000, has a five-year life, and has no salvage...
You are evaluating a project that costs $530,000, has a five-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 50,000 units per year. Price per unit is $42, variable cost per unit is $22, and fixed costs are $650,000 per year. The tax rate is 30 percent, and you require a 12 percent return on this project. A) Calculate the accounting break-even point. B) Calculate...
You are evaluating a project that requires an investment of $99 today and garantees a single...
You are evaluating a project that requires an investment of $99 today and garantees a single cash flow of ​$128 one year from now. You decide to use 100% debt​ financing, that​ is, you will borrow ​$99. The​ risk-free rate is 7% and the tax rate is 37%. Assume that the investment is fully depreciated at the end of the​ year, so without leverage you would owe taxes on the difference between the project cash flow and the​ investment, that​...
You are planning to invest in a project which costs $40 million today. The project will...
You are planning to invest in a project which costs $40 million today. The project will produce returns of $4 million per year for five years and the scrap value will be $20 million. That is, you will receive $4 million at the end of the year, for each of the next five years, and you will receive $20 million at the end of the fifth year. Question (a) [2 marks] What is the net present value of the project...
You are considering a project that costs $500 to invest in today, and will pay you...
You are considering a project that costs $500 to invest in today, and will pay you $100 next year, $50 in two years, and $100 in three years. The cash inflow will grow at a constant rate of 3% per year after year 3, and you will receive cash inflows for 25 years (total including the first three CFs). Your discount rate is 14%. What is the NPV of the project? Also, what would the NPV be if the cash...
You are considering a project that costs $500 to invest in today, and will pay you...
You are considering a project that costs $500 to invest in today, and will pay you $100 next year. The cash inflow will grow at a constant rate of 3% per year after year 1, and you will receive cash inflows for 20 years (total including the first year CF). Your discount rate is 16%. What is the NPV of the project? Also, what would the NPV be if the cash inflows continued forever? Show your work.
We are evaluating a project that costs $1,675,000, has a six year life, and has no...
We are evaluating a project that costs $1,675,000, has a six year life, and has no salvage value. Assume that depreciation is straight line to zero over the life of the project. Sales are projected as 91,000 units per year, price is $35.95 per unit, variable cost is $21.4 per unit, fixed costs are $775,000 per year. Tax rate is 35% and discount rate is 11%. 1) calculate base-case profit, profit with a 100-unit increase or 100-unit decrease, and break-even...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT