A project will cost $180,000. The after-tax future cash flows are expected to be$50,000 annually for 7 years. Based on this information, what is the project's DPB ifthe interest rate is 8%? An investment project costs $22,366 and has annual cashflows of $6,556 for six years. What is the discounted payback period if the discountrate is zero percent?

Problem 1: Discounted Payback Period (DPB) with an 8% Discount RateGiven:Initial cost of the project…

Answered: A project will cost $180,000. The…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 16P

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Project X costs $10,000 and will generate annual net cash inflows of $4,800 for five years. What is the NPV using 8% as the discount rate?
Redbird Company is considering a project with an initial investment of $265,000 in new equipment that will yield annual net cash flows of $45,800 each year over its seven-year life. The companys minimum required rate of return is 8%. What is the internal rate of return? Should Redbird accept the project based on IRR?
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An investment project costs $16,800 and has annual cash flows of $4, 100 for six years. a. What is the discounted payback period if the discount rate is zero percent? b. What is the discounted payback period if the discount rate is 6 percent? c. What is the discounted payback period if the discount rate is 21 percent?
A new project will have an intial cost of $14,000. Cash flows from the project are expected to be $0, $6,000, and $10,000 over the next 3 years, respectively. Assuming a discount rate of 18%, what is the project's NPV?
A new project will have an intial cost of $10,000. Cash flows from the project are expected to be $3,000, $3,500, and $4,000 over the next 3 years, respectively. Assuming a discount rate of 8%, what is the project's Payback Period?
(Calculating the payback period, NPV, PI, and IRR) You are considering a project with an initial cash outlay of $75,000 and expected cash flows of $21,750 at the end of each year for six years. The discount rate for this project is 9.9 percent. a. What are the project's payback and discounted payback periods? b. What is the project's NPV? c. What is the project's PI? d. What is the project's IRR? a. The payback period of the project is years. (Round to two decimal places.)
If a project costs $120,000 and is expected to return $29,000 annually, how long does it take to recover the initial investment? What would be the discounted payback period at /= 16%? Assume that the cash flows occur continuously throughout the year. The payback period is years. (Round to one decimal place.)
An investment project costs $15,300 and has annual cash flows of $3,700 for six years. a. What is the discounted payback period if the discount rate is zero percent? Discounted payback period b. What is the discounted payback period if the discount rate is 4 percent? Discounted payback period c. What is the discounted payback period if the discount rate is 20 percent? Discounted payback period
If a project costs $50,000 and is expected to return $10,000 annually, how long does it take to recover the initial investment? What would be the discounted payback period at i=18%? Assume that the cash flows occur continuously throughout the year.

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