A project has annual cash flows of $5,000 for the next 10 years and then $11,000 each year for the following 10 years. The IRR of this 20-year project is 12.33 %. If the firm's WACC is 8%, what is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest cent.

A project has annual cash flows of $5,000 for the next 10 years and then $11,000 each year for the following 10 years. The IRR of this 20-year project is 12.33 %. If the firm's WACC is 8%, what is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest cent.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 3CMA

See similar textbooks

Related questions

Q: 1) 1) An asset for petroleum refining was purchased for $720,000, and placed in service by an oil…

Q: The Cost of Capital: Cost of New Common Stock m plans to issue new stock, flotation costs…

A: We have to calculate the cost of equity without flotation and with flotation and difference between…

Q: Q5: The cash transactions and cash balances of Flagg, Inc., for August were as follows: 1. The…

A: Bank Reconciliation Statement:- A bank reconciliation statement refers to the statement prepared to…

Q: 3. Problem 11.03 (MIRR) 1 eBook H Problem Walk-Through Project L requires an initial outlay at t 0…

A: Numerous capital budgeting tools can be used by an investor to assess an investment proposal's…

Q: 29. If the future is 25% more than the principal after 8 months, determine the simple interest rate.…

A: In case of the simple interest the interest amount is computed only on the initial principal amount.…

Q: Trey Monson starts a merchandising business on December 1 and enters into the following three…

A: SOLUTION- WEIGHTED AVERAGE PERPETUAL - THE AVERAGE COST WILL BE CALCULATED EVERY TIME THE AVERAGE…

Q: look at the image to help me solve the problem

A: Cash flows from Operating Activities = Net Income + Non Cash expenses - Non Cash Income

Q: eBook A store has 5 years remaining on its lease in a mall. Rent is $2,000 per month, 60 payments…

A: Present value is a financial concept that represents the value of a future sum of money in terms of…

Q: 20.00% 0.00% -20.00% -40.00% -60.00% -80.00% -100.00 % Equity Capital Stock additional paid-in…

A: Interpretation is the activity which is done in order to evaluate the financial statements so that…

Q: In the table below you have information concerning a project, (t) represents the year, (r) is the…

A: Cash inflow represents the cash receipt of the company whereas, cash outflow represents the cash…

Q: Relevant and sunk costs Don Baxter's 6-year-old Chevrolet Impala requires repairs estimated at…

A: a) Relevant costs are the costs which are relevant in decision making. The repair costs of Old…

Q: You have a depreciable asset as follows: Equipment purchased for $100,000 Useful life is 10 years…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: ginformation at its annual meetings: The company had cash and marketable securities orth $4,159,357,…

A: SOLUTION:- Net working capital = Current assets - Current liabilities Current assets =$1,235,455…

Q: 28. P 6000 is borrowed for 75 days at 18% per annum. How much will be due at the end of 75 days? Use…

A: Simple interest refers to the method that is used for calculating the amount of interest on a…

Q: P12-3B The income statement of Hubble Company is presented below. Additional information: 1.…

A: Cash flow statements are the statements that determine the inflow and outflow of cash from three…

Q: A store has 5 years remaining on its lease in a mall. Rent is $2,100 per month, 60 payments remain,…

A: old lease facts: 5 years remaining casflow -2000 per month at end of period, 60 paymentsnew lease:…

Q: ctivity based costing

A: Machine hours system-Overheads are allocated based on machine hours used Activity Based Costing…

Q: I need help figuring out the attached image

A: Life of the machine = 1 year cost of machine = $2,000 Output of the machine = $2,300

Q: Q2: Jimmys Co. is a small photography studio in Karachi. Photographers use the studio to make high…

A: Following are the requisite financial Statements

Q: Return on Sales Coca Cola Company Pepsi Co Return on Assets Coca Cola Company Pepsi Co Return on…

A: The financial ratio is used to calculate the financial status or production of a company compared to…

Q: Future Value Interest Rate Number of Periods Present Value $713.00 $88,677.00 3.5% ? 6.5% 34 ?…

A: Present value = Future value / (1+rate)^years

Q: BE18.8 (LO 2) Vertical analysis (common-size) percentages for Palau Company's sales goods sold, and…

A: Vertical analysis refers to the comparison of items in two or more years. The percentage of each…

Q: HASF PVT.LTD BUDGETED INCOME STATEMENT FOR 1* QUARTER 1999 Description JANUARY FEBRUARY MARCH Sales…

A: a. Prepare the cash budget for the months of January, February, and March for 1999. Excel working:

Q: the impact (if any) on the Accounting Fauation: [ Choose ] Assets increased and Liabilities…

A: Assets = Liabilities + Stockholders' Equity Any expense paid in advance is an asset.

Q: On December 31 of Swift Co's first year, $58,000 of accounts receivable is not yet collected. Swift…

A: Accounts receivable is the amount which company will get in near future but has not yet been…

Q: Key Performance Metrics of Coca-Cola Company 184,159 181,520 192,342 181,520 192,342 181,823 1 1 1…

Q: GenX Furnishings manufactures designer furniture. GenX Furnishings uses a job order cost system.…

A: Issuance of materials The material storeroom releases raw materials for used in manufacturing…

Q: 27.In a loan with 20% simple interest, the future amount is P2,000 more the principal after one…

A: Simple interest is quite simple there is no compouding of interest and there is no interest on…

Q: Q4: China Beijing Salon purchased new furniture for its store on April 1, 2001. The furniture is…

A: Introduction The cost of assets which should be capitalized includes all the expenses incurred on…

Q: 1 eBook Problem Walk-Through Your division is considering two projects with the following cash flows…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: Suppose the charge account of Strong's Mailing Service at the local supply store had a 1.8% interest…

A: A charge account refers to an account provided by a financial institution that allows access to…

Q: Solstice Company determines on October 1 that it cannot collect $58,000 of its accounts receivable…

A: Direct write-off method. The seller can charge the amount of an invoice to the bad debt expense…

Q: Your division is considering two projects with the following cash flows (in millions): 2 3 Project A…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: I need help explaining the graphs, below please.

A: Cash flow from financing activities: It shows the cash inflow and outflow from a company's financing…

Q: Required: 1. Determine the total variable costs and the total fixed costs for the current year.…

A: Hi student Since there are multiple subparts, we will answer only first three subparts. If you want…

Q: 40. If the future amount is 50 % more than the principal after 8 months .determine * the simple…

A: SIMPLE INTEREST Simple interest is one of the important financial management techniques which…

Q: iv. Which GAAP principle is clearly reflecting from above statement? Explain that GAAP principle…

A: "Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Study plan example 19.3 use activity-based management (ABM) to make decisions CYU19-1 Drab Dog…

A: ABC system of costing means where overhead is assigned with specific task and then absorbed on the…

Concept explainers

Cash Flow Statement Analysis

A company's cash flow is the movement of its cash inflows and cash outflows. A cash flow statement is prepared to determine changes in an organization's cash position. A cash flow statement shows how much money was generated and spent on the business during the fiscal year. The cash flow analysis is a method of analyzing an organization's investing, financing, and operating activities. A cash flow statement reveals an organization's liquidity and solvency, as well as its ability to change cash flows in the future. It eliminates the other effects of accounting methods by improving the comparability of different organizations' operational performance.

Question

please solve this practice problem using the images below

11. Problem 11.20 (NPV)
eBook
A project has annual cash flows of $5,000 for the next 10 years and then $11,000 each year for the following 10 years. The IRR of this 20-year project is 12.33%. If the firm's WACC is 8%, what is the project's NPV? Do not round intermediate calculations.
Round your answer to the nearest cent.
$
BA

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Formula

VIEW

Step 2: NPV calculations

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

17. Problem 11.20 (NPV) eBook A project has annual cash flows of $6,000 for the next 10 years and then $10,500 each year for the following 10 years. The IRR of this 20-year project is 11.42%. If the firm's WACC is 8%, what is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest cent. $
11. Problem 11.20 (NPV) eBook A project has annual cash flows of $7,500 for the next 10 years and then $5,500 each year for the following 10 years. The IRR of this 20-year project is 11.33%. If the firm's WACC is 11%, what is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest cent. BO $
9. Problem 11.02 (IRR) dofice eBook Project L costs $54,779.63, its expected cash inflows are $13,000 per year for 8 years, and its WACC is 11%. What is the project's IRR? Round your answer to two decimal places. %
5. eBook Problem Walk-Through Project L requires an initial outlay at t = 0 of $55,000, its expected cash inflows are $13,000 per year for 9 years, and its WACC is 7%. What is the project's discounted payback? Do not round intermediate calculations. Round your answer to two decimal places. years 8
11
13
3. Problem 11.03 (MIRR) eBook Problem Walk-Through Project L requires an initial outlay at t = 0 of $55,000, its expected cash inflows are $13,000 per year for 9 years, and its WACC is 9%. What is the project's MIRR? Do not round intermediate calculations. Round your answer to two decimal places. BE %
3. eBook Problem Walk-Through Project L requires an initial outlay at t = 0 of $45,000, its expected cash inflows are $12,000 per year for 9 years, and its WACC is 10%. What is the project's MIRR? Do not round intermediate calculations. Round your answer to two decimal places. % 4. Project L requires an initial outlay at t = 0 of $61,000, its expected cash inflows are $11,000 per year for 7 years, and its WACC is 12%. What is the project's payback? Round your answer to two decimal places. years
man.7
NPV ..... Excel please Project L requires an initial outlay at t = 0 of $50,000, its expected cash inflows are $15,000 per year for 9 years, and its WACC is 10%. What is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest cent.
еВook Problem Walk-Through Project L requires an initial outlay at t = 0 of $57,771, its expected cash inflows are $12,000 per year for 8 years, and its WACC is 12%. What is the project's IRR? Round your answer to two decimal places. %
eBook A project has annual cash flows of $4,000 for the next 10 years and then $8,500 each year for the following 10 years. The IRR of this 20-year project is 10.99%. If the firm's WACC is 10%, what is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest cent.