A firm evaluates all of its projects by applying the NPV decision rule. A project underconsideration has the following cash flows:YearCash Flow0-$27,800111,8002314,80010,800What is the NPV for the project if the required return is 11 percent? (Do not roundintermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)NPVAt a required return of 11 percent, should the firm accept this project?Yes○ NoWhat is the NPV for the project if the required return is 25 percent? (A negativeanswer should be indicated by a minus sign. Do not round intermediate calculationsand round your answer to 2 decimal places, e.g., 32.16.)NPV

Step 1: The calculation of the NPV ABCDEF1YearCashflowPVF @ 11%PVF @ 25%PV @ 11%PV @ 25%20…

Answered: A firm evaluates all of its projects by…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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
A project has cash flows of –$148,000, $43,000, $87,000, and $51,500 for Years 0 to 3, respectively. The required rate of return is 11 percent. Based on the internal rate of return of Blank 1 percent for this project, you should Blank 2 the project. Enter your answer in the first blank as a percent rounded to 2 decimal places, e.g., 32.16. Also enter either "accept" or "reject" in the second blank.
Payback period. Given the cash flow of two projects-A and B-in the following table, and using the payback period decision model, which project(s) do you accept and which proje period for recapturing the initial cash outflow? For payback period calp What is the payback period for project A? 6 Data Table - X years (Round to one decimal place.) (Click on the following icon D in order to copy its contents into a spreadsheet.) Cash Flow B. Cost Cash flow year 1 Cash flow year 2 Cash flow year 3 Cash flow year 4 Cash flow year 5 Cash flow $12,000 $6,000 $6,000 $6,000 $100,000 $20,000 $10,000 $40,000 $6,000 $30,000 SO $6,000 $6,000 year 6. SO Print Done
Compute the payback statistic for Project Y and recommend whether the firm should accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 11 percent and the maximum allowable payback is one year. Time: 0 1 2 3 4 5 Cash flow: −100 75 100 300 75 200
A project has the following cash flows: Year Cash Flow 0 $ 37,000 1 -18,000 227,000 What is the IRR for this project? (Round the final answer to 2 decimal places.) IRR % What is the NPV of this project, if the required return is 11% ? ( Negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) NPV $ What is the NPV of the project if the required return is 0% ? ( Negative answer should be indicated by a minus sign. Omit $ sign in your response.) NPV $ What is the NPV of the project if the required return is 22 % ? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) NPV $
Which of the following statements is incorrect regarding project appraisal techniques? At IRR, the NPV of a project is equal to 0 If the IRR of a project is 8%, its NPV calculated using a discount rate greater than 8%, will be less than 0 If the NPV of a project is greater than 0, then its PI will exceed 1. If the PI of a project equals 0, then the project's initial cash outflow equals the PV of its cash inflows
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.
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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.
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 what percent for this project, you should accept or reject the project. Enter your answer in the first blank as a percent rounded to 2 decimal places, e.g., 32.16. Also enter either "accept" or "reject" in the second blank.

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