Agape Mining Inc. is evaluating a project with the following cash flows: Year 0 1 2 3 4 5 6 7 8 o Discounted payback period o o Construct a spreadsheet and calculate the following (the required rate of return is 11%): o Payback period Internal rate of return (IRR) Modified IRR Cashflow -$380,000,000.00 $79,000,000.00 $82,000,000.00 -$53,000,000.00 $175,000,000.00 $195,000,000.00 -$40,000,000.00 $188,000,000.00 $71,000,000.00 o Net present value (NPV) . • The discounting approach The reinvestment approach The combination approach Based on your analysis, should the company take the project? Why?
Agape Mining Inc. is evaluating a project with the following cash flows: Year 0 1 2 3 4 5 6 7 8 o Discounted payback period o o Construct a spreadsheet and calculate the following (the required rate of return is 11%): o Payback period Internal rate of return (IRR) Modified IRR Cashflow -$380,000,000.00 $79,000,000.00 $82,000,000.00 -$53,000,000.00 $175,000,000.00 $195,000,000.00 -$40,000,000.00 $188,000,000.00 $71,000,000.00 o Net present value (NPV) . • The discounting approach The reinvestment approach The combination approach Based on your analysis, should the company take the project? Why?
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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![Agape Mining Inc. is evaluating a project with the following cash flows:
Year
0
1
2
3
4
5
6
7
8
Cashflow
-$380,000,000.00
$79,000,000.00
$82,000,000.00
-$53,000,000.00
$175,000,000.00
$195,000,000.00
-$40,000,000.00
$188,000,000.00
$71,000,000.00
Construct a spreadsheet and calculate the following (the required rate of return is 11%):
o Payback period
o Discounted payback period
o Internal rate of return (IRR)
Modified IRR
o
. The discounting approach
The reinvestment approach
The combination approach
o Net present value (NPV)
Based on your analysis, should the company take the project? Why?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F095ea013-5eb7-4aaf-a23a-6e29389c2c79%2Fb6728166-5aff-4167-a6bf-6b2cc981cf88%2Fk2k93lk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Agape Mining Inc. is evaluating a project with the following cash flows:
Year
0
1
2
3
4
5
6
7
8
Cashflow
-$380,000,000.00
$79,000,000.00
$82,000,000.00
-$53,000,000.00
$175,000,000.00
$195,000,000.00
-$40,000,000.00
$188,000,000.00
$71,000,000.00
Construct a spreadsheet and calculate the following (the required rate of return is 11%):
o Payback period
o Discounted payback period
o Internal rate of return (IRR)
Modified IRR
o
. The discounting approach
The reinvestment approach
The combination approach
o Net present value (NPV)
Based on your analysis, should the company take the project? Why?
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