Alpha corp is considering an investment that has a cost of $285,000. The table below shows the cash inflows for the project. What is the IRR of the project? if the required return for the project is 15.5%, should they accept the project? year cash flow 1 $79,000 2 $82,000 3 $95,000
Cost of Debt, Cost of Preferred Stock
This article deals with the estimation of the value of capital and its components. we'll find out how to estimate the value of debt, the value of preferred shares , and therefore the cost of common shares . we will also determine the way to compute the load of every cost of the capital component then they're going to estimate the general cost of capital. The cost of capital refers to the return rate that an organization gives to its investors. If an organization doesn’t provide enough return, economic process will decrease the costs of their stock and bonds to revive the balance. A firm’s long-run and short-run financial decisions are linked to every other by the assistance of the firm’s cost of capital.
Cost of Common Stock
Common stock is a type of security/instrument issued to Equity shareholders of the Company. These are commonly known as equity shares in India. It is also called ‘Common equity
Alpha corp is considering an investment that has a cost of $285,000. The table below shows the
year cash flow
1 $79,000
2 $82,000
3 $95,000
4 $105,000
5 $83,000
IRR is 9.27% reject the project
IRR is 9.27% accept the project
IRR is 16.35% reject the project
Not enough information is provided to calculate the IRR
IRR is 16.35% accept the project
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