3. You are the CEO of Cardinal Company (a small handheld technology firm) and have just been briefed on a promising new product with projected cash flows detailed below. Discuss your assessment of this project's viability and profitability. Explain the principles of evaluating cash inflows and outflows. Calculate payback period, total return on investment, internal rate of return, and net present value. State any assumptions (ie. discount rate). Explain your reasoning behind those assumptions. Capital Expenditures $18,000,000 Year Revenue 2016 2017 $3,000,00 2018 $4,000,00 2019 $6,500,00 2020 $7,500,00 $3,500,000 2021 $7,500,00 2022 $8,000,00 $1,500,000 2023 $8,500,00 2024 $9,000,00 $2,000,000 2025 $9,500,00
3. You are the CEO of Cardinal Company (a small handheld technology firm) and have just been briefed on a promising new product with projected cash flows detailed below. Discuss your assessment of this project's viability and profitability. Explain the principles of evaluating cash inflows and outflows. Calculate payback period, total return on investment, internal rate of return, and net present value. State any assumptions (ie. discount rate). Explain your reasoning behind those assumptions. Capital Expenditures $18,000,000 Year Revenue 2016 2017 $3,000,00 2018 $4,000,00 2019 $6,500,00 2020 $7,500,00 $3,500,000 2021 $7,500,00 2022 $8,000,00 $1,500,000 2023 $8,500,00 2024 $9,000,00 $2,000,000 2025 $9,500,00
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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Transcribed Image Text:3. You are the CEO of Cardinal Company (a small handheld technology firm) and have
just been briefed on a promising new product with projected cash flows detailed
below. Discuss your assessment of this project's viability and profitability. Explain
the principles of evaluating cash inflows and outflows. Calculate payback period,
total return on investment, internal rate of return, and net present value. State any
assumptions (ie. discount rate). Explain your reasoning behind those assumptions.
Саptal
Expenditures
$18,000,000
Year
Revenue
2016
2017
$3,000,00
2018
$4,000,00
2019
$6,500,00
2020
$7,500,00 $3,500,000
2021
$7,500,00
2022
$8,000,00 $1,500,000
2023
$8,500,00
2024
$9,000,00 $2,000,000
2025
$9,500,00
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