A project has the following cashflows. The project's cumulative cashflow turns positive between year 4 and5, to be precise it is 4.22. Your further analysis indicates that you are too conservative about the cash flowsfor Year 1 and 2. You expect both cash flows to be at least $1000 higher, if not more :) How will this affectyour calculation of the precise time when the cumulative cashflow turns positive?t0ON 35 6724$Cash flow(250,000)41,00048,00063,00079,00088,00064,00041,000Changes. The project's cumulative cashflow turns positive a bit earlier.Changes. The project's cumulative cashflow now turns positive a lot later.Changes. The project's cumulative cashflow now turns positive a bit later.No change. The project's cumulative cashflow still turns positive between year 4 and 5, to be precise itis 4.22.

The payback period is the time needed to recover the cost of the investment. Businesses, financial…

A project has the following cashflows. The project's cumulative cashflow turns positive between year 4 and 5, to be precise it is 4.22. Your further analysis indicates that you are too conservative about the cash flows for Year 1 and 2. You expect both cash flows to be at least $1000 higher, if not more :) How will this affect your calculation of the precise time when the cumulative cashflow turns positive? t 0 1 2 3 4 5 6 $ Cash flow (250,000) 41,000 48,000 63,000 79,000 88,000 64,000

A project has the following cashflows. The project's cumulative cashflow turns positive between year 4 and 5, to be precise it is 4.22. Your further analysis indicates that you are too conservative about the cash flows for Year 1 and 2. You expect both cash flows to be at least $1000 higher, if not more :) How will this affect your calculation of the precise time when the cumulative cashflow turns positive? t 0 1 2 3 4 5 6 $ Cash flow (250,000) 41,000 48,000 63,000 79,000 88,000 64,000

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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Tuttle Enterprises is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that if a project's projected NPV is negative, it should be rejected. WACC: Year Cash flows a. $196.28 b. $395.09 c. $680.00 Od. $223.76 e. $473.68 14.00% 0 -$1,000 1 $420 2 $420 3 $420 4 $420
Taggart Inc. is considering a project that has the following cash flow data. What is the project's payback in years? Year 0 1 2 3 Cash flows -$1,175 $460 $460 $460 Please explain and provide calculations.
For year 6, a project requires Accounts Receivable of $121,000; Inventory of $51,000; and Accounts Payable of $107,000. Each of these will return to zero in year 7. What year 7 incremental cash flow reflects the change in NWC? Enter your answer in dollars and be sure to use a negative sign (-) if the answer is a cash outflow. X -65,000
Are there multiple IRRs for the following cash-flow sequence? How many are possible according to Descartes' rule of signs? If ε = 9% per year, what is the ERR for the cash flows of this project? Let MARR = 9% per year. ΕΟΥ 0 1 2 Cash Flow ($) 120 90 50 3 20 4 - 1,810 5 580 6 510 There is (are) multiple IRR(s) for the given cash-flow sequence. A maximum of two IRR value(s) is (are) suggested by the Descartes' rule of signs. The ERR for the cash flows of this project is%. (Round to two decimal places.) 7 410 8 330 9 180 10 110
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): a. What are the IRRs of the two projects? b. If your discount rate is 4.7%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently? Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 0 Project A Year 1 - -$51 $27 B - $101 $22 Year 2 $21 $42 Year 3 $20 Year 4 $13 $51 $59 - ☑
Compute the internal rate of return for the cash flows of the following two projects. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Year Project A 0 -$13,800 Project B -$ 11,400 1 5,400 2,900 2 6,200 8,500 3 5,000 4,600 Project A Project B % %
Consider the following two mutually exclusive projects: Year Cash Flow (X) Cash Flow (Y) 0 -$ 15,900 -$ 15,900 1 6,710 7,290 2 7,290 7,730 3 4,810 3,630 a. What is the IRR of Project X? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decim b. What is the IRR of Project Y? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decim c. What is the crossover rate for these two projects? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decim a. IRR b. IRR % % c. Crossover rate %
Which of the following comes closest to the net present value (NPV) of a project whose initial investment is $5 and which produces two cash flows: the first at the end of year 2 of $3 and the second at the end of year 4 of $7? The required rate of return is 13%? Select one: a. $1.84 b. $0 c. $1.64 d. $2.05 e. $2.26
Anderson Systems is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that if a project's projected NPV is negative, it should be rejected. WACC: 9.00% Year 0 1 2 3 Cash $1,0 $50 $50 $50 flows 00 00 0 O A. $265.65 B. $278.93 C. $292.88 D. $307.52 E. $322.90
Data Computer Systems is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's IRR can be less than the WACC (and even negative), in which case it will be rejected. Year 0 1 2 3 Cash flows -$1,100 $450 $480 $500
June.com is considering two projects given below: if the two projects have the same payback period, what would be project 2’s internal rate of return (IRR)? (Hint: you need to find project 1’s payback and find project 2 cashflow at year 0 using project 1’s payback period). Year Project 1 Project 2 Cash Flow Cash Flow cumulative cash flow 0 -$100 ? 1 30 40 -$70 2 50 80 -$20 3 40 60 $20 4 50 60 $70
A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows: Year 0 Cash Flow -$ 27,800 1 11,800 -23 3 14,800 10,800 If the required return is 18 percent, what is the IRR for this project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) IRR %

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