A company is considering an iron ore extraction project that requires an initial investment of $520,000 and will yield annual cash inflows of $156,000 for four years. The company's discount rate is 9%. What is the NPV of the project? Present value of an ordinary annuity of $1: 8% 9% 10% 1 2 3 45678 0.926 1.783 2.577 3.312 3.993 4.623 5.206 5.747 OA. $(104,000) OB. $14,560 OC. $(14,560) OD. $104,000 0.917 1.759 2.531 3.24 3.89 4.486 5.033 5.535 0.909 1.736 2.487 3.17 3.791 4.355 4.868 5.335 ....

A company is considering an iron ore extraction project that requires an initial investment of $520,000 and will yield annual cash inflows of $156,000 for four years. The company's discount rate is 9%. What is the NPV of the project? Present value of an ordinary annuity of $1: 8% 9% 10% 1 2 3 45678 0.926 1.783 2.577 3.312 3.993 4.623 5.206 5.747 OA. $(104,000) OB. $14,560 OC. $(14,560) OD. $104,000 0.917 1.759 2.531 3.24 3.89 4.486 5.033 5.535 0.909 1.736 2.487 3.17 3.791 4.355 4.868 5.335 ....

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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Whispering Winds Company is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts Initial investment $400000 $600000 Annual net income 28000 44000 Net annual cash inflow 106000 130000 Estimated useful life 5 years 6 years Salvage value 0 The company requires a 10% rate of return on all new investments. Present Value of an Annuity of 1 Periods 9% 10% 11% 12% 5 3.89 3.791 3.696 3.605 6 4.486 4.355 4.231 4.111 The annual rate of return for Project Soup is ○ 7.0%. ○ 53%. ○ 14%. ○ 26.5%.
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Use the following table, Present Value of an Annuity of 1 Period 8% 9% 10% 1.926.917 .909 2 1.783 1.759 1.736 3 2.577 2.531 2.487 A company has a minimum required rate of return of 9%. It is considering investing in a project which costs $350,000 and is expected to generate cash inflows of $140,000 at the end of each year for three years. The net present value of this project is ? $354,340. $4,340. $70,000. $35,436.
Royal Arts Company has invested 18000 as the initial investment into a new project. the following are the expected cash flows from the project. the appropriate discount rate is 5% what is the NPV of the project?Year 1 11000Year 2 8000Year 3 2000
Project X has an upfront $3.5 million capital expe which is converted into an equivalent seven year annuity at a discount rate of 8% per year. Project Z has a $7 million initial capital outlay and will last for 14 years. Project Z has the same discount rate as Project X. What is the annualized capital cost of Project X? O $766,912 O $742,753 O $528,050 O $672,253
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Project A requires an original investment of $64,300. The project will yield cash flows of $19,600 per year for seven years. Project B has a calculated net present value of $3,760 over a four-year life. Project A could be sold at the end of four years for a price of $14,000. Below is a table for the present value of $1 at Compound interest. Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636 5 0.747 0.621 0.567 Below is a table for the present value of an annuity of $1 at compound interest. Year 6% 10% 12% 1 0.943 0.909 0.893 2 1.833 1.736 1.690 3 2.673 2.487 2.402 4 3.465 3.170 3.037 5 4.212 3.791 3.605 Use the tables above. (a) Using the present value tables above, determine the net present value of Project A over a four-year life with salvage value assuming a minimum rate of return of 12%. Round your answer to two decimal places. Enter negative values as negative numbers.$fill in the blank 1 (b) Which…
A company is considering an iron ore extraction project that requires an initial investment of $508,000 and will yield annual cash inflows of $152,000 for four years. The company's discount rate is 9%. What is the NPV of the project? Present value of an ordinary annuity of $1: 8% 9% 10% 1 2 3 4 5 6 7 8 0.926 1.783 2.577 3.312 3.993 4.623 5.206 5.747 OA $101,600 OB. $15,520 OC. $(15,520) OD. $(101,000) 0.917 1.759 2.531 3.24 3.89 4.486 5.033 5.535 0.909 1.736 2.487 3.17 3.791 4.355 4.668 5.335
A company is considering an iron ore extraction project that requires an initial investment of $1,200,000 and will yield annual cash inflows of $534,283 for three years. The company's discount rate is 9%. Calculate IRR. Present value of ordinary annuity of $1: 10% 12% 14% 15% 16% 18% 20% 1 0.909 0.893 0.877 0.870 0.862 0.847 0.833 1.736 1.690 1.647 1.626 1.605 1.566 1.528 3 2.487 2.402 2.322 2.283 2.246 2.174 2.106 4 3.170 3.037 2.914 2.855 2.798 2.690 2.589 OA. 16% OB. 15% D OC. 14% O OD. 18%
A project that provides annual cash flows of $11322 for eight years costs $80145 today. At what discount rate would you be indifferent between accepting the project and rejecting it? (Enter your answer as a percentage, omit the "%" sign in your response, and round your answer to 2 decimal places. For example, 0.12345 or 12.345% should be entered as 12.35.)
Maldonado Steel invested in a new project that has an internal rate of return (IRR) of 9%. They expect the project to have annual cash flows of $52,000 for six years. What were the capital expenditures for this project (the PV of an annuity for 6 periods at 9% = 4.48592)? $261,713.40 $233,267.84 $202,261.80 $226,473.52

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