A firm evaluates all of its projects by applying the IRR rule. A project under considerationhas the following cash flows:YearCash Flow0-$27,400111,40023314,40010,400If the required return is 16 percent, what is the IRR for this project? (Do not roundintermediate calculations and enter your answer as a percent rounded to 2 decimalplaces, e.g., 32.16.)IRR%Should the firm accept the project?○ Yes○ No

We have given cash flow of 4 years, By using IRR formula in excel we found IRR is, IRR = 15.53 %…

Answered: A firm evaluates all of its projects by…

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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a. They payback period of project A is ___ years (round to two decimal places) The payback period of project B is ____ years. (round to two decimal places) According to the payback method, which project should the firm choose? b. The NPV of project A is $___ The NPV of project B is $___ c. The IRR of project A is ___ The IRR of project B is ___ d. Make a reccomendation
The following are two projects a firm is considering: Project B Cash Flow Year 0 1 2 3 4 $2,939.01 Assuming that the relevant cost of capital for both projects is 11%, you should be able to determine the net present value (NPV) and the internal rate of return (IRR) for both project. Assume now that the firm has capital rationing, but knows that its true reinvestment rate is 20%, while its cost of capital is 11 percent. Given this information, determine the modified net present value (MNPV) for Project B. O $2.479.00 O $2.965.10 O$3.479.89 Project A Cash Flow O $4,084.05 ($10,000.00) ($11,000.00) $3,000.00 $5,000.00 $4,000.00 $4,000 00 $5,000.00 $4,000.00 $2,000.00 $2,000.00
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Duo Corporation is evaluating a project with the following cash flows: Year Cash Flow 0 −$ 15,200 1 6,300 2 7,500 3 7,100 4 5,900 5 −3,300 The company uses an interest rate of 12 percent on all of its projects. Calculate the MIRR of the project using all three methods. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.
Typed and correct answer please. I ll rate
Compute the payback period statistic for Project X and recommend whether the firm should accept or reject the project with the cash flows shown in the chart if the maximum allowable payback is four years. year 0-(-$1,450) Year 1-$250 Year 2-$380 Year 3-$620 Year 4-$1,000 Year 5-$100
Please do not provide solution in image format and give proper explanation.
Consider the following project-balance profiles for proposed investment projects: Now consider the following statements:Statement 1: For Project A, the cash flow at the end of year 2 is $100.Statement 2: The future value of Project C is $0.Statement 3: The interest rate used in the Project B balance calculationsis 25%.Which of the preceding statements is (are) correct?(a) Just statement 1.(b) Just statement 2.(c) Just statement 3.(d) All of them.
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$ 15,456 5,225 8,223 13,013 8,705 0 1 234 -$ 276,363 26,400 51,000 57,000 402,000 Whichever project you choose, if any, you require a 6 percent return on your investment. a. What is the payback period for Project A? Payback period b. What is the payback period for Project B? Payback period c. What is the discounted payback period for Project A? Discounted payback period
For the given cash flows, suppose the firm uses the NPV decision rule. Year Cash Flow 0-$ 150,000 1 66, 000 2 73,000 3 57,000 a. At a required return of 10 percent, what is the NPV of the project? b. At a required return of 20 percent, what is the NPV of the project?
A company is considering three alternative investment projects with different net cash flows. The present value of net cash flows is calculated using Excel and the results follow. Potential Projects Present value of net cash flows (excluding initial investment) Initial investment Project A $ 11,226 (10,000) Project B $ 10,568 (10,000) a. Compute the net present value of each project. b. If the company accepts all positive net present value projects, which of these will it accept? c. If the company can choose only one project, which will it choose on the basis of net present value? Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the net present value of each project. Potential Projects Project A Project B Project C Present value of net cash flows Initial investment Net present value $ $ $
A firm evaluates all of its projects by applying the IRR rule. Year Cash Flow 0 1 2 3 162,000 54,000 85,000 69,000 What is the project's IRR? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Internal rate of return %

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