A project cost 80000 is expects to generate cash flows are given as follows.@10%Year12345CF2000015000800060007000PV factor0.8930.7920.7120.6360.567 Calculate the NPV and justify whether the project is recommended or not.

Net present value is calculated as follows - Present value of cash inflows - Present value of cash…

Answered: A project cost 80000 is expects to…

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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Given the following cash flows for project X and project Y, Year Project X Project Y 0 -55000 -100000 1 20000 15000 2 13500 17000 3 11000 19000 4 10000 25000 5 9000 30000 6 7500 35000 Calculate the NPV, IRR, MIRR and traditional payback period for each project, assuming a required rate of return of 7 percent If the projects are independent, which project(s) should be selected? If they are mutually exclusive, which project should be selected? (Answer in word form please)
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Consider the following list of projects: Project Investment ($) 135,000 200,000 125,000 150,000 175,000 75,000 80,000 A B C D E F G H O O Assuming that your capital is constrained, which investment tool should you use to determine the correct investment decisions? Incremental IRR IRR 200,000 50,000 Profitability Index NPV NPV ($) 6000 30,000 20,000 2000 10,000 10,000 9000 20,000 4000
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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?
Please solve step by step for clarity, thank you!
A project has the following cash flows: C * 0 = - 100000; C 1 = 50000 C * 2 = 150000 C 3 = 100000 . If the discount rate changes from 12 percent to 15 percent, what is the CHANGE in the NPV of the project ( approximately)? Multiple Choice 12,750 increase 12,750 decrease 14,240 increase 14,240 decrease

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Year	1	2	3	4	5
CF	20000	15000	8000	6000	7000
PV factor	0.893	0.792	0.712	0.636	0.567

A project cost 80000 is expects to generate cash flows are given as follows.@10% Year 1 2 3 4 5 CF 20000 15000 8000 6000 7000 PV factor 0.893 0.792 0.712 0.636 0.567 Calculate the NPV and justify whether the project is recommended or not.