A project requiring an immediate investment of $130,000 and a further outlay of $44,000 after four years has residual value of $34,000 after nine years. The project yields a negative net return of $11,000 in Year 1, a 0 ne return in Year 2, $50,000 per year for the following four years, and $68,000 per year for the last three years. Your answer must be correct to exactly 4 decimal places and must not include the percent sign, "%". Use Excel's Internal Rate of Return Function, do not calculate this by hand. Internal Rate of Return =

A project requiring an immediate investment of $130,000 and a further outlay of $44,000 after four years has residual value of $34,000 after nine years. The project yields a negative net return of $11,000 in Year 1, a 0 ne return in Year 2, $50,000 per year for the following four years, and $68,000 per year for the last three years. Your answer must be correct to exactly 4 decimal places and must not include the percent sign, "%". Use Excel's Internal Rate of Return Function, do not calculate this by hand. Internal Rate of Return =

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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Similar questions

A project that provides annual cash flows of $16,900 for eight years costs $75,000 today. What is the NPV for the project if the required return is 7 percent? What is the NPV for the project if the required return is 19 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) At what discount rate would you be indifferent between accepting the project and rejecting it? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
A project requires an initial outlay of - $822,000. Expected cash flows in each of the next four years are $383,000; $ 161,000; $163,000; and $320,000. If the cost of capital is 14%, what is the project's NPV? Round your answer to the nearest penny. Be sure you enter a negative sign (-) if your answer is a negative number.
An investment under consideration has a payback of seven years and a cost of $884,000. Assume the cash flows are conventional. If the required return is 11 percent, what is the worst-case NPV? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
ThreeRivers Corp. is considering the purchase of a new piece of equipment with a life of 12 years. The internal rate of return of the project is 20%. ThreeRivers has a required rate of return (hurdle rate) of 17%. The project would have: Multiple Choice a net present value greater than zero. a payback period more than 12 years. a net present value of zero. an accounting rate of return greater than 17%.
Novak Company is contemplating an investment costing $168,810. The investment will have a life of 8 years with no salvage value and will produce annual cash flows of $30,500. Click here to view PV tables. What is the approximate internal rate of return associated with this investment? (Use the above table.) (Round answer to O decimal places, e.g. 15%) Internal rate of return. %6
A project has an initial cost of $50,000, expected net cash inflows of $9,000 per year for 12 years, and a cost of capital of 12%. What is the project's PI? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to two decimal places.
Suppose a particular investment project will require an initial cash outlay of $1,400,000 and will generate a cash inflow of $700,000 in each of the next three years. What is the project’s IRR? Suppose a company’s hurdle rate is 20%, should it accept the project? Group of answer choices 20%; accept the project 23%; accept the project 20%; reject the project 23%; reject the project
A project that costs $2,300 to install will provide annual cash flows of $730 for each of the next 5 years. a. Calculate the NPV if the opportunity cost of capital is 12%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) NPV b. Is this project worth pursuing? Yes O No c. What is the project's internal rate of return IRR? (Do not round intermediate calculations. Round your answer to 2 decimal places.) %24
A project has an initial cost of $40,000, expected net cash inflows of $11,000 per year for 8 years, and a cost of capital of 12%. What is the project's MIRR? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to two decimal places.
An investment under consideration has a payback of seven years and a cost of $870,000. Assume the cash flows are conventional. If the required return is 11 percent, what is the worst-case NPV? (A negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. Worst-case NPV $ 3,270,444.91 ×
A project costs $2,620 up front (year 0), and its net cash flows are expected to be +$856 per year for 8 years (with the first cash flow occurring one year from today). If the WACC is 12%, the project's NPV is $_________. Do not round any intermediate work. Round your *final* answer to 2 decimal places (example: 12.34567 = 12.35). Do not enter the $ sign. Include a negative sign if your answer is negative.
A project that provides annual cash flows of $2,620 for eight years costs $9,430 today. a.At a required return of 8 percent, what is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)b.At a required return of 24 percent, what is the NPV of the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)c.At what discount rate would you be indifferent between accepting the project and rejecting it? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

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