A project requires a $30,000 initial investment and is expected to generate end-of-period annual cash inflows as follows:Year 1$ 12,000i = 10%n = 10.9091Year 2$ 8,000Assuming a discount rate of 10%, what is the net present value (rounded to the nearest whole dollar) of this investment? Selected present valuefactors for a single sum are shown in the table below:Oi = 10%n = 20.8264Multiple Choice$0Year 3$ 10,000O $21,000i =Total$ 30,000= 10%n = 30.7513

Net present value :— It is the difference between the present value of all cash inflows and the…

Answered: A project requires a $30,000 initial…

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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With an initial cost of $100,000, a WACC of 15%, and subsequent cash flows for years 1, 2, 3 of $25,000, $50,000, $75,000, in how many years will break even occur? Use non-discounted cash flows for your calculation. Use the information above and calculate the discounted payback period what is the project’s NPV?
A project has the following cash flows set out below. What is the profitability index of this project if the relevant discount rate is 2 percent? Enter your final answer to two decimal places. Year Cash flow 0 -1,745 1 537 2 2,066 3 3,912
Consider a project with the following cash flows in dollars ($): Year Cash Flow0 -15,0001 50002 50003 50004 5000 Assume the appropriate discount rate for this project is 12%. What is the payback period for this project? (Round your answer to the tenths.)
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Hello Mitty Ltd is considering a project MEA as shown below. The estimated cash flows for this project is as follows: Project MEA £000 Investment (immediate cash outflow) 70 Net annual cash inflows: Year 1 40 Year 2 45 The business’s cost of finance is estimate at 12 per cent. Calculate: a) The net present value for project MEA. b) The approximate internal rate of return for project MEA.
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