1. John approached you with a business proposition to invest in a project. The Annual Cash Flows (CFt) are uncertain. Höwever, the folloWing PrObaDmy UISUIDODON provides you with expectations: Probability P(CF) Probable Cash Flow (CF) $80,000 $140,000 $180,000 15 55 30 What is the expected Annual Cash Flow from this project?

1. John approached you with a business proposition to invest in a project. The Annual Cash Flows (CFt) are uncertain. Höwever, the folloWing PrObaDmy UISUIDODON provides you with expectations: Probability P(CF) Probable Cash Flow (CF) $80,000 $140,000 $180,000 15 55 30 What is the expected Annual Cash Flow from this project?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

Nikita Berhad is evaluating a project which expected to earn a series of cash inflows as shown in the table below. The initial investment of this project is RM52,300. If the required rate of return is 12 percent, determine whether this project is profitable or loss by calculating the net present value and profitability index techniques.
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 9 percent, and that the maximum allowable payback and discounted payback statistics for the project are 2.0 and 3.0 years, respectively. Time: 0 1 2 3 4 5 6 Cash flow: -$7,300 $1,160 $2,360 $1,560 $1,560 $1,360 $1,160 Use the Pl decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.) PI 0.94 Should it be accepted or rejected? O rejected O accepted
A firm wants to start a project. A team of financial analysts estimated the following cash flows year cash flow 0 -$100,000 1 55,000 2 43,000 3 45,000 Suppose that the discount rate (interest rate) is 12%. According to the calculation of NPV we should Group of answer choices not undertake the project undertake the project we can not decide because we do not have enough information undertake the project in the short run and do not under take it in the long run
16. You are considering an investment with the following cash flows: Year Cash Flow 0 -$50,000 1 $ 7,000 2 $ 4,000 3 $9,000 4 $61,000 What is the internal rate of return (IRR) for this investment? SHOW WORK
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, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Time: 0 1 2 3 4 5 6 Cash flow: -$4,900 $1,260 $2,460 $1,660 $1,660 $ 1,460 $1,260 Use the NPV decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.) 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 12 percent, and that the maximum allowable payback and discounted payback statistics for your company are 2.5 and 3.0 years, respectively. Time: 0 1 2 3 4 5 Cash flow -$228,000 $65, 100 $83,300 $140, 300 $121,300 $80, 500 Use the discounted payback decision rule to evaluate this project. (Do not round intermediate…
Compute the PI statistic for Project Q and advise the firm whether to accept of reject the project with the cash flows shown as follows if the appropriate cost of capital is 12% Time 0 1 2 3 4 5 Cash Flows -1000 250 180 420 300 100
get the answer as per posiblity
Use the information provided below to answer questions 23 to 25. The projected annual net cash flows associated with an investment opportunity are shown below in Table 5. The expected rate of return on the investment is 12%. Year 1 220 000 250 000 300 000 200 000 5 180 000 Table 5: Annual net cash flows of the investment opportunity. 2 3 4 Question 23 Question 24 Future Cash flows A R859 028 B R902 575 C R838 510 D R866 704 Discount factor Question 25 K Determine the missing values represented by K, L, M, and N in Table 5. A K = 0.8929; L = R196 438; M = 0.7118 and N = R213 540 BK = 0.9009; L = R198 198; M = 0.7312 and N = R219 360 C K=0.9174; L = R201 828; M = 0.7722 and N = R231 660 D K = 0.8929; L = R196 438; M = 0.7722 and N = R231 540 A R811 490 B R850 000 C R848 510 D R860 000 0.7972 M Calculate the total present value of the net cash flows from the investment opportunity. 0.6355 0.5674 Present Values L 199 300 N 127 100 102 132 If the Net Present Value of the investment…
A project has the following cashflows. The project's cumulative cashflow turns positive between year 4 and 5, to be precise it is 4.22. Your further analysis indicates that you are too conservative about the cash flows for Year 1 and 2. You expect both cash flows to be at least $1000 higher, if not more :) How will this affect your calculation of the precise time when the cumulative cashflow turns positive? t 0 ON 35 67 2 4 $ Cash flow (250,000) 41,000 48,000 63,000 79,000 88,000 64,000 41,000 Changes. The project's cumulative cashflow turns positive a bit earlier. Changes. The project's cumulative cashflow now turns positive a lot later. Changes. The project's cumulative cashflow now turns positive a bit later. No change. The project's cumulative cashflow still turns positive between year 4 and 5, to be precise it is 4.22.
What would be the interest rate that would allow you to convert an investment from B/.5,000 to B/.20,227.79 in 10 years? (NOTE: Do this problem ONLY with Conversion Factor and the corresponding Excel Financial Function and remember to confirm your answer with the corresponding Cash Flow Table)
Consider cash flows Year 0: -6900 Y1: 1700 Y2: 2900 Y3: 2900 Y4: 3500 What is the profitability index for this project if the return is 10%
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 7 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Time: Cash flow: 0 2 3 4 5 -$5,400 $1,600 $2,800 $2,000 $2,000 $1,800 Use the MIRR decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.) 6 $1,600

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