A cash flow sequence has a receipt of $20,000 today, followed by a disbursement of $17,000 at the end of this year and again next year, and then a receipt of $13,100 three years from now. The MARR is 6 percent. a. What is the ERR for this set of cash flows? b. What is the approximate ERR for this set of cash flows? c. Would a project with these cash flows be a good investment? a. The ERR is%. (Round to two decimal places as needed.)

A cash flow sequence has a receipt of $20,000 today, followed by a disbursement of $17,000 at the end of this year and again next year, and then a receipt of $13,100 three years from now. The MARR is 6 percent. a. What is the ERR for this set of cash flows? b. What is the approximate ERR for this set of cash flows? c. Would a project with these cash flows be a good investment? a. The ERR is%. (Round to two decimal places as needed.)

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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Calculate/estimate the IRR(s) for a 6-year project with the following cash flows: CF0 = -50, CF1 =28 = CF2 = CF3 = CF4 = CF5, and CF6 = -93. In Excel, plot the NPV (= Y axis) against r (= discountrate), using r = 0%, 2%, and so on until you find all IRRs in the chart. Identify/estimate all IRRs.
Resnick Inc. is considering a project that has the following cash flow data. What is the project's payback? Year Cash flows O a. 1.44 years O b. 2.08 years O c. 2.92 years O d. 1.54 years e. 2.54 years O 0 -$500 $240 2 $240 3 $240
7. Consider two investments A and B with the sequences of cash flows given in the table below. 12 Click the icon to view the cash flows for the projects. (a) Compute the IRR for each investment. The rate of return for Project A is %. (Round to one decimal place.) The rate of return for Project B is %. (Round to one decimal place.) (b) At MARR = 15%, determine the acceptability of each project. Would you accept Project A? Choose the correct answer below. Yes O No Would you accept Project B? Choose the correct answer below. Yes No (c) If A and B are mutually exclusive projects, which project would you select based on the rate of return on incremental investment at MARR = 15%? The rate of return on the incremental investment is %. (Round to one decimal place.) Which project would you select based on the rate of return on incremental investment at MARR = 15%? Choose the correct answer below. O Project B Project A 12: More Info Net Cash Flow Project A Project B - $125,000 - $110,000 30,000…
A project has cash flows of -$148,000, $43,000, $87,000, and $44,000 for Years 0 to 3, respectively. The required rate of return is 11 percent. Based on the internal rate of return of the project. percent for this project, you should
There is a project with the following cash flows : Year Cash Flow 0 −$ 23,350 1 6,300 2 7,400 3 8,450 4 7,350 5 5,900 What is the payback period?
An investment project has annual cash inflows of $4,400, $3,900, $5,100, and $4,300, for the next four years, respectively. The discount rate is 14 percent. a. What is the discounted payback period for these cash flows if the initial cost is $5,700? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the discounted payback period for these cash flows if the initial cost is $7,800? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the discounted payback period for these cash flows if the initial cost is $10,800? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Discounted payback period years b. Discounted payback period years C. Discounted payback period years
Consider two investments with the following sequences of cash flows: (a) Compute the IRR for each investment.(b) At MARR = 15%. determine the accepta bility of each project.(c) If A and B are mutually exclusive projects. which project would you selecton the basis of the rate of return on incremental investment?
How do you do this?
Manshukh
Consider the following project-balance profiles for proposed investment projects, where the project-balance figures are rounded to the nearest dollar: (a) Compute the net present worth of each investment.(b) Determine the project balance at the end of period 2 for Project C ifA2 = $500.(c) Determine the cash flows for each project.(d) Identify the net future worth of each project.
calculate the net present value of the following: Project A requires an initial investment of $1,000 and is expected to generate cash flows of $400 per year for 3 years
Are there multiple IRRs for the following cash-flow sequence? How many are possible according to Descartes' rule of signs? If ε = 9% per year, what is the ERR for the cash flows of this project? Let MARR = 9% per year. ΕΟΥ 0 1 2 Cash Flow ($) 120 90 50 3 20 4 - 1,810 5 580 6 510 There is (are) multiple IRR(s) for the given cash-flow sequence. A maximum of two IRR value(s) is (are) suggested by the Descartes' rule of signs. The ERR for the cash flows of this project is%. (Round to two decimal places.) 7 410 8 330 9 180 10 110

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