a firm wants to start a project. A team of financial analysts estimated the following cash flows; Year Cash flow 0 -$100000 1 $55000 2 $43000 3 $45000 1. Suppose the discount rate (interest rate) is 12%, what is the NPV? 2. Suppose that the discount rate (interest rate) is 12%, according to the calculation of NPV we should? 3. the payback period is? 4. Based on the payback period calculations and if the cut off point is 2 years, the project should? 5. Suppose that the discount rate (interest rate) is 12%, the profitability index (PI) is? 6. suppose that the discount rate (interest rate) is 12% based on the PI calculation, the project should?
a firm wants to start a project. A team of financial analysts estimated the following cash flows; Year Cash flow 0 -$100000 1 $55000 2 $43000 3 $45000 1. Suppose the discount rate (interest rate) is 12%, what is the NPV? 2. Suppose that the discount rate (interest rate) is 12%, according to the calculation of NPV we should? 3. the payback period is? 4. Based on the payback period calculations and if the cut off point is 2 years, the project should? 5. Suppose that the discount rate (interest rate) is 12%, the profitability index (PI) is? 6. suppose that the discount rate (interest rate) is 12% based on the PI calculation, the project should?
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 firm wants to start a project. A team of financial analysts estimated the following cash flows;
| Year | Cash flow |
| 0 | -$100000 |
| 1 | $55000 |
| 2 | $43000 |
| 3 | $45000 |
1. Suppose the discount rate (interest rate) is 12%, what is the NPV?
2. Suppose that the discount rate (interest rate) is 12%, according to the calculation of NPV we should?
3. the payback period is?
4. Based on the payback period calculations and if the cut off point is 2 years, the project should?
5. Suppose that the discount rate (interest rate) is 12%, the profitability index (PI) is?
6. suppose that the discount rate (interest rate) is 12% based on the PI calculation, the project should?
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