A proposed nuclear power plant will cost $2.9 billion to build and then will produce cash flows of $370 million a year for 15 years. After that period (in year 15), it must be decommissioned at a cost of $970 million. Note: Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in billions rounded to 3 decimal places. a. What is the NPV of the project if the discount rate is 4%? Net present value billion b. What is the NPV of the project if the discount rate is 16 % ? Net present value billion

A proposed nuclear power plant will cost $2.9 billion to build and then will produce cash flows of $370 million a year for 15 years. After that period (in year 15), it must be decommissioned at a cost of $970 million. Note: Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in billions rounded to 3 decimal places. a. What is the NPV of the project if the discount rate is 4%? Net present value billion b. What is the NPV of the project if the discount rate is 16 % ? Net present value billion

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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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
You are trying to value the following project for your company. You know that the project will generate free cash flows in perpetuity that will grow at a constant annual rate of 1.5% after year 3. The applicable interest rate for this project is 7.5%. What is the NPV of this project? Express your result in $-millions and round to two decimals (do not include the $-symbol in your answer). If you calculate a negative NPV enter a negative number. Year Free Cash Flows Free Cash Flow Forecasts (in $-millions) 0 -130 Year 1 -1 2 3 24 37
Pendleton Products has a project requiring an initial cash investment of $3,100. The project is expected to return $1,000 each period for the next 5 periods, and it has a discount rate of 4%.1. Determine how long it will take, if at all, for the project to have a positive payback.Present value formula:
Godo
Ross enterprises is considering a 3 year project with the following cash flows: Time 0: spend $4800 Time 1: collect $2200Time 2: collect $3600 Time 3: collect $1400 Ross's discount rate is 7.0%. What is the NPV of the project? (Do not roundintermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.).
An investment has an installed cost of $787,350. The cash flows over the four-year life of the investment are projected to be $312,615, $304,172, $245,367, and $229,431. a. If the discount rate is zero, what is the NPV? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. If the discount rate is infinite, what is the NPV? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations
An investment project has annual cash inflows of $5,000, $3,300, $4,500, and $3,700, for the next four years, respectively. The discount rate is 14 percent. a. What is the discounted payback period for these cash flows if the initial cost is $5,100? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the discounted payback period for these cash flows if the initial cost is $7,200? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the discounted payback period for these cash flows if the initial cost is $10,200? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Discounted payback period b. Discounted payback period c. Discounted payback period years years years
Can you show me how this is done? Emily Company has a minimum required rate of return of 9%. It is considering investing in a project that costs $90,671 and is expected to generate cash inflows of $23,576 at the end of each year for three years. The profitability index for this project is Round your answer to 2 decimal places. Selected Answer: 65 Correct Answer: 0.66 ± 0.05
Bluekettle Inc. is considering a project that has the following cash. What is the project's NPV(net present value) if you use a required rate of 14% ? If the NPV is negative, put the minus sign in front of your answer, such as -200.56. Note that a project's projected NPV can be negative, in which case it will be rejected. Year 0 1 2 3 Cash flows - $6,500 $1,600 $3,700 $7,500
Border Mining, Inc., is trying to evaluate a project with the following cash flows: Year Cash Flow 0 −$ 39,300,000 1 63,300,000 2 − 12,300,000 a-1. What is the NPV for the project if the company requires a return of 12 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a-2. Should the firm accept this project?
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.)
Pendleton Products has a project requiring an initial cash investment of $3,100. The project is expected to return $1,000 each period for the next 5 periods, and it has a discount rate of 4%.1. Determine how long it will take, if at all, for the project to have a positive payback.Present value formula:

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