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1 A с E F G H 2 3 34 A project that provides annual cash flows of $15,300 for nine years costs $74,000 today. Is this a good project if the required return is 8 percent? What if it's 20 percent? At what discount rate would you be indifferent between accepting the project and rejecting it? 4 Input area: 5 сл 6 Annual cash flows 7 Years 8 Costs 9 Required Return $15,300 9 $74,000 8% 20% 10 Required Return 11 12 (Use cells A6 to B10 from the given information to complete this question. You must use the built-in 13 Excel function to answer this question.) 14 15 Output area: 16 17 NPV at 8% 18 NPV at 20% 19 IRR 20 21

1 A с E F G H 2 3 34 A project that provides annual cash flows of $15,300 for nine years costs $74,000 today. Is this a good project if the required return is 8 percent? What if it's 20 percent? At what discount rate would you be indifferent between accepting the project and rejecting it? 4 Input area: 5 сл 6 Annual cash flows 7 Years 8 Costs 9 Required Return $15,300 9 $74,000 8% 20% 10 Required Return 11 12 (Use cells A6 to B10 from the given information to complete this question. You must use the built-in 13 Excel function to answer this question.) 14 15 Output area: 16 17 NPV at 8% 18 NPV at 20% 19 IRR 20 21

Financial Management: Theory & Practice
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter26: Real Options
Section: Chapter Questions
Problem 9SP
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1 A с E F G H 2 3 34 A project that provides annual cash flows of $15,300 for nine years costs $74,000 today. Is this a good project if the required return is 8 percent? What if it's 20 percent? At what discount rate would you be indifferent between accepting the project and rejecting it? 4 Input area: 5 сл 6 Annual cash flows 7 Years 8 Costs 9 Required Return $15,300 9 $74,000 8% 20% 10 Required Return 11 12 (Use cells A6 to B10 from the given information to complete this question. You must use the built-in 13 Excel function to answer this question.) 14 15 Output area: 16 17 NPV at 8% 18 NPV at 20% 19 IRR 20 21
Transcribed Image Text:1 A с E F G H 2 3 34 A project that provides annual cash flows of $15,300 for nine years costs $74,000 today. Is this a good project if the required return is 8 percent? What if it's 20 percent? At what discount rate would you be indifferent between accepting the project and rejecting it? 4 Input area: 5 сл 6 Annual cash flows 7 Years 8 Costs 9 Required Return $15,300 9 $74,000 8% 20% 10 Required Return 11 12 (Use cells A6 to B10 from the given information to complete this question. You must use the built-in 13 Excel function to answer this question.) 14 15 Output area: 16 17 NPV at 8% 18 NPV at 20% 19 IRR 20 21
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