New question 21

Suppose you are evaluating a project with the cash inflows shown in the following table. Your boss has asked you to calculate the project’s net present value (NPV). You don’t know the project’s initial cost, but you do know the project’s regular, or conventional, payback period is 2.5 years. The project's annual cash flows are: Year Cash Flow Year 1 $325,000 Year 2 600,000 Year 3 300,000 Year 4 450,000   If the project’s desired rate of return is 9.00%, the project’s NPV is     . (Hint: Round your calculations to the nearest dollar.)

Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project’s net present value (NPV). You don’t know the project’s initial cost, but you do know the project’s regular, or conventional, payback period is 2.50 years. Year Cash Flow Year 1 $375,000 Year 2 $450,000 Year 3 $475,000 Year 4 $425,000   If the project’s weighted average cost of capital (WACC) is 10%, the project’s NPV (rounded to the nearest dollar) is: $267,719   $312,338   $297,465   $282,592     Which of the following statements indicate a disadvantage of using the regular payback period (not the discounted payback period) for capital budgeting decisions? Check all that apply. The payback period does not take the time value of money into account.   The payback period does not take the project’s entire life into account.   The payback period is calculated using net income…

Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project’s net present value (NPV). You don’t know the project’s initial cost, but you do know the project’s regular, or conventional, payback period is 2.50 years. Year Cash Flow Year 1 $375,000 Year 2 $450,000 Year 3 $425,000 Year 4 $450,000   If the project’s weighted average cost of capital (WACC) is 10%, the project’s NPV (rounded to the nearest dollar) is: $317,074   $332,173   $241,580   $301,975     Which of the following statements indicate a disadvantage of using the regular payback period (not the discounted payback period) for capital budgeting decisions? Check all that apply. The payback period does not take the time value of money into account.   The payback period is calculated using net income instead of cash flows.   The payback period does not take the project’s…

Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project’s net present value (NPV). You don’t know the project’s initial cost, but you do know the project’s regular, or conventional, payback period is 2.50 years. Year Cash Flow Year 1 $300,000 Year 2 $500,000 Year 3 $425,000 Year 4 $450,000 1. If the project’s weighted average cost of capital (WACC) is 9%, the project’s NPV (rounded to the nearest dollar) is: $380,120   $330,539   $264,431   $314,012   2. Which of the following statements indicate a disadvantage of using the regular payback period (not the discounted payback period) for capital budgeting decisions? Check all that apply.   The payback period is calculated using net income instead of cash flows.   The payback period does not take the time value of money into account.   The payback period does not take the project’s entire life…

What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project’s net present value (NPV). You don’t know the project’s initial cost, but you do know the project’s regular, or conventional, payback period is 2.50 years. Year Cash Flow Year 1 $350,000 Year 2 $500,000 Year 3 $450,000 Year 4 $425,000   If the project’s weighted average cost of capital (WACC) is 8%, the project’s NPV (rounded to the nearest dollar) is: $312,620   $295,253   $277,885   $347,356     Which of the following statements indicate a disadvantage of using the regular payback period (not the discounted payback period) for capital budgeting decisions? Check all that apply. The payback period is calculated using net income instead of cash flows.   The payback period does not take the project’s entire life into account.…

The NPV and payback period What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project’s net present value (NPV). You don’t know the project’s initial cost, but you do know the project’s regular, or conventional, payback period is 2.50 years. Year Cash Flow Year 1 $325,000 Year 2 $450,000 Year 3 $475,000 Year 4 $425,000   Q1. If the project’s weighted average cost of capital (WACC) is 8%, the project’s NPV (rounded to the nearest dollar) is:   a. $381,870   b. $363,686   c. $327,317   d. $309,133   Q2. Which of the following statements indicate a disadvantage of using the regular payback period (not the discounted payback period) for capital budgeting decisions? Check all that apply.   a. The payback period is calculated using net income instead of cash flows.   b. The payback…

7. The NPV and payback period What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project’s net present value (NPV). You don’t know the project’s initial cost, but you do know the project’s regular, or conventional, payback period is 2.50 years. Year Cash Flow Year 1 $375,000 Year 2 $475,000 Year 3 $500,000 Year 4 $400,000   If the project’s weighted average cost of capital (WACC) is 8%, the project’s NPV (rounded to the nearest dollar) is: $345,386   $328,117   $414,463   $362,655

7. The NPV and payback period What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project’s net present value (NPV). You don’t know the project’s initial cost, but you do know the project’s regular, or conventional, payback period is 2.50 years. Year Cash Flow Year 1 $300,000 Year 2 $450,000 Year 3 $500,000 Year 4 $500,000   If the project’s weighted average cost of capital (WACC) is 8%, the project’s NPV (rounded to the nearest dollar) is: $470,812   $449,412   $513,613   $428,011     Which of the following statements indicate a disadvantage of using the regular payback period (not the discounted payback period) for capital budgeting decisions? Check all that apply. The payback period does not take the time value of money into account.   The payback period is calculated using net…

What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's net present value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years. If the project's weighted average cost of capital (WACC) is 9%, the project's NPV (rounded to the nearest dollar) is: $355,048 $287,420 $405,769 $338,141 Which of the following statements indicate a disadvantage of using the regular payback period (not the discounted payback period) for capital budgeting decisions? Check all that apply. The payback period does not take the time value of money into account. The payback period is calculated using net income instead of cash flows. The payback period does not take the project's entire life into account.

You've estimated the following cash flows (in $) for a project:   A B 1 Year Cash flow 2 0 -3,000 3 1 900 4 2 1,300 5 3 1,606 The required return is 8.5%.  1. What is the IRR for the project? 2. What is the NPV of the project? 3. What should you do? Check all that apply: Accept the project based on its IRR Accept the project based on its NPV Reject the project based on its IRR Reject the project based on its NPV

Please answer the following questions using the information below: NPV. Using a 10% required rate of return, calculate the NPV for this project. Should  it be accepted or rejected?  PI. Calculate the Profitability Index (PI) for this project. Should it be accepted or  rejected?   Consider the following cash flows:  Year 0 1 2 3 4 5 6  Cash Flow -$8,000 $3,000 $3,600 $2,700 $2,500 $2,100 $1,600  Payback. The company requires all projects to payback within 3 years. Calculate the payback period. Should it be accepted or rejected?  Discounted Payback. Calculate the discounted payback using a discount rate of 10%.  Should it be accepted or rejected? IRR. Calculate the IRR for this project. The company’s required rate of return is  10%. Should it be accepted or rejected?  NPV. Using a 10% required rate of return, calculate the NPV for this project. Should  it be accepted or rejected?  PI. Calculate the Profitability Index (PI) for this project. Should it be accepted or  rejected?…

What information does the payback period provide? Suppose Omni Consumer Products’s CFO is evaluating a project with the following cash inflows. She does not know the project’s initial cost; however, she does know that the project’s regular payback period is 2.5 years. Year Cash Flow Year 1 $375,000 Year 2 $400,000 Year 3 $400,000 Year 4 $500,000   If the project’s weighted average cost of capital (WACC) is 7%, what is its NPV? $389,529   $432,810   $454,451   $411,170     Which of the following statements indicate a disadvantage of using the discounted payback period for capital budgeting decisions? Check all that apply. The discounted payback period is calculated using net income instead of cash flows.   The discounted payback period does not take the time value of money into account.   The discounted payback period does not take the project’s entire life into account.

What information does the payback period provide? Suppose Omni Consumer Products's CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost; however, she does know that the project's regular payback period is 2.5 years. Year Year 1 Cash Flow $375,000 Year 2 $450,000 Year 3 $400,000 Year 4 $400,000 If the project's weighted average cost of capital (WACC) is 10%, what is its NPV? $261,541 $313,849 $287,695 $222,310 Which of the following statements indicate a disadvantage of using the discounted payback period for capital budgeting decisions? Check all that apply. ㅁㅁ The discounted payback period is calculated using net income instead of cash flows. The discounted payback period does not take the project's entire life into account. The discounted payback period does not take the time value of money into account.

You've estimated the following cash flows (in $) for a project:   A B 1 Year Cash flow 2 0 -5,300 3 1 1,300 4 2 2,100 5 3 3,700 The required return for the project is 8%. 1. What is the IRR for the project? 2. Should you accept the project? Yes or No?

Green Cars Inc. is considering a project with the following expected cash flows.   Year Cash Flow 0 -$75,000 1 $18,500 2 $18,500 3 $18,500 4 $18,500 5 $12,500 6 $12,500 7 $12,500 8 $12,500   What is the payback period of this project?

The projected cash flows from a project costing $180,000 today are as follows: years 1-3 years 4-9 $0 $40,000 per year year 10 $70,000 per year If the required rate of return is 9 percent, a. Find the MIRR. b. Given your answer "a", should you accept/reject the project?

What information does the payback period provide? Suppose Praxis Corporation's CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost; however, she does know that the project's regular payback period is 2.5 years. Year Cash Flow Year 1 $375,000 Year 2 $475,000 Year 3 $450,000 Year 4 $400,000 If the project's weighted average cost of capital (WACC) is 7%, what is its NPV? O $362,843 $326,559 O $417,269 O $308,417

A project has the following cash flows.  Year 0 1 2 3 4 Amount -200 950 -850 75 12 You are a financial analyst, and note the sequence of cash flows.   What is the internal rate of return for this project?   Round your answer to two decimal places.

​(Payback​period, NPV,​ PI, and IRR calculations​) You are considering a project with an initial cash outlay of ​$80,000 and expected free cash flows of ​$26,000 at the end of each year for 6 years. The required rate of return for this project is 7 percent.   a. What is the​ project's payback​ period? b. What is the​ project's NPV​? c. What is the​ project's PI​? d. What is the​ project's IRR​?