Company Rapid Growth is considering the following project: Year 0 1 2 3 4 5 Cash Flows -$80100 $10500 $25800 $34000 $36200 $53400 What's the net present value (NPV) of the project, assuming 9.00% discount rate?

Company Rapid Growth is considering the following project: Year 0 1 2 3 4 5 Cash Flows -$80100 $10500 $25800 $34000 $36200 $53400 What's the net present value (NPV) of the project, assuming 9.00% discount rate?

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

See similar textbooks

Related questions

Q: Consider the following information for an internal rate of return calculatoin. Projected cash flow…

A: The internal rate of return is the rate at which the NPV of the project is zero, which means no…

Q: Find the NPV for the following project if the firm's WACC is 8%. Year Cash Flow 0 -18500 1 8,000 2…

A: Npv is also known as Net present value It is a capital budegting techniques which help in decision…

Q: A company is considering a project that has the following cash flows with a WACC of 10.00%. What is…

A: The discounted payback period calculates the time taken to recover the initial cost after…

Q: For the given cash flows, suppose the firm uses the NPV decision rule. Year 0 1 2 3 Cash Flow -$…

A: NPV can be calculated by following function in excel=NPV(rate,value1,[value2],…) + Initial…

Q: Myca Corporation has a project with the following cash flows. What is the value of the cash flows…

A: The present value of cash flows refers to the value of future cash flows discounted to the present…

Q: Consider a project with the following cash flows: Year Cash Flow - 8000 1 3200 2 3200 3 3200 4 3200…

A: Capital budgeting techniques are used to analyze the profitability of long term projects and…

Q: An investment project has expected cash flows as shown below. The required rate of return for the…

A: Required rate of return = 11.8% Year Cash flow 0 -91000 1 21000 2 40000 3 43000 4 55000…

Q: Company Z is considering a project that has the following cash flow data. Assuming a WACC of 8.0%,…

A: The discounted payback period can be used to compare several investment options and identify the…

Q: Imagine you are investing $100,000 into a project A. MARR is 15% This investment will bring you the…

A: Investment in Project $100000 Annual Positive Cashflwos = $ 31000 from year 1 to year MARR = 15%

Q: Given the following end of year cash flows (CF), estimate the internal rate of return (IRR) of this…

A: Step 1: Given Value for Calculation Cost of Capital = 10%Cash Flow for Year 0 = cf0 = 0Cash Flow…

Q: s. What is the present value of these cash flows if the discount rate is 189%?

A: Present Value: It represents the present worth of the future annual cash flow stream. It is…

Q: A project will generate the following cash flows. The required rate of return is 15%. If the…

A: Profitability index: Profitability is computed by dividing the present value of cash inflow to…

Q: Find the IRR for the following project assuming a WACC of 10%. Year Cash Flow 0 -20,000 1 8,000 2…

A: YearCash Flows0($20,000)1$8,0002$10,0003$4,0004$5,000Required:Internal Rate of Return=?

Q: Company Rapid Growth is considering the following project: Year 0 1 2 3 4 5 Cash Flows -$89300…

A: Net present value (NPV) is used to determine the present value of all future cash flows. Net present…

Q: Company Rapid Growth is considering the following project: Year 0 1 2 3 4 5 Cash Flows -$87800…

A: Profitability Index: It is the tool that measures the relationship between PV(Present Value) of cash…

Q: Find the NPV for the following project if the firm's WACC is 8%. Year Cash Flow 0 -18700 1 8,000 2…

A: NPV stands for net present value. It is an important capital budgeting metric. NPV is the sum of…

Q: Company Rapid Growth is considering the following project: Year 0 1 2 3 4 5 Cash Flows -$88800…

A: Payback period is period required to recover initial investment of PROJECT.

Q: What is the Accounting Rate of Return (ARR)? ARR = 3.7% ARR = 7.1% ARR = 6.8% ARR = 9.4%

A: The accounting rate of return is used to determine the expected return on investment in relation to…

Q: A project has the following cash flows. What is the internal rate of return? Years Cash flow…

A: Solution:- Internal Rate of Return (IRR) is the rate of return which the bank is yielding. At IRR,…

Q: Company Rapid Growth is considering the following project: Year 0 1 2 3 4 5 Cash Flows -$89700…

A: Given: Year Cash flow 0 -$89,700 1 $10,300 2 $25,800 3 $33,600 4 $38,300 5 $56,300

Q: The annual cash flows of a project are shown in the table below: Year t = 0 t = 1 t = 2 Cash Flow…

A: The internal rate of return is the rate of return at which NPV of the project is equal to zero or…

Q: What is the net present value of a project with the following cash flows if the discount rate is 12…

A: Computation:

Q: A project requires a $48,000 initial investment and is expected to generate end-of-period annual…

A: Net present value is used in project accept/reject decision, in capital budgeting. Net present value…

Q: What is the true IRR of the following project? 70

A: The modified internal rate of return is used in capital budgeting to evaluate the profitability of…

Q: You've estimated the following cash flows (in $) for a project: A B 1 Year Cash flow 2 0 -3,000 3…

A: IRRIRR is the required rate of return for the project to have zero Net Present value.IRR can be…

Q: At a required rate of return of 15.0%, Project B's present value is obviously higher than that of…

A: Present value is defined as the current value of an amount or sum of money to be received at some…

Q: Fuente, Incorporated, has identified an investment project with the following cash flows. Cash Flow…

A: The objective of the question is to calculate the future value of cash flows at different discount…

Q: What is the estimated market value of the project when employing the Discounted Cash Flow (DCF)…

A: The discounted cash flow method is a valuation metric that is used to arrive at the value of the…

Q: Resnick Inc. is considering a project that has the following cash flow data. What is the project's…

A: The payback period technique is used to ascertain the time in which the initial investment will be…

Q: Living Colour Co. has a project available with the following cash flows: Year Cash Flow 0…

A: Net present worth of a project can be calculated by considering the present value of cashflows.…

Q: A project requires a $41,000 initial investment and is expected to generate end-of-period annual…

A: Net present value refers to the method of capital budgeting used for estimating the viability of a…

Question

Company Rapid Growth is considering the following project:

Year	0	1	2	3	4	5
Cash Flows	-$80100	$10500	$25800	$34000	$36200	$53400

What's the net present value (NPV) of the project, assuming 9.00% discount rate?

Definition Definition Calculation used to evaluate the investment and financing decisions that involve cash flows occurring over multiple periods. NPV is calculated as the difference between the present value of cash inflow and cash outflow. NPV is used for capital budgeting and investment planning as well as to compare similar investment alternatives.

Expert Solution

Step 1

Given:

Year	Cash flow
0	-$80,100
1	$10,500
2	$25,800
3	$34,000
4	$36,200
5	$53,400

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Similar questions

The following are two projects a firm is considering: Project B Cash Flow Year 0 1 2 3 4 $2,939.01 Assuming that the relevant cost of capital for both projects is 11%, you should be able to determine the net present value (NPV) and the internal rate of return (IRR) for both project. Assume now that the firm has capital rationing, but knows that its true reinvestment rate is 20%, while its cost of capital is 11 percent. Given this information, determine the modified net present value (MNPV) for Project B. O $2.479.00 O $2.965.10 O$3.479.89 Project A Cash Flow O $4,084.05 ($10,000.00) ($11,000.00) $3,000.00 $5,000.00 $4,000.00 $4,000 00 $5,000.00 $4,000.00 $2,000.00 $2,000.00
Darius Inc. is considering a project that has the following cash flow data. Given WACC = 10%, what is the project's NPV? Year 0 = $-100,000 Year 1 = $45,000 Year 2 = $10,000 Year 3 = $0 Year 4 = $50,000 Year 5 = $15,000 Question 2Answer a. $0 b. $2,321.10 c. $1.20 d. $-7,361.95 e. $-1,230.18 f. $-524.23
Use the information below to answer Question#40: GIVEN: The XYZ Company is considering the following project with its corresponding financial data. The Company requires a 9% return from its investments. $ 500,000 $ 200,000 $ 225,000 $ 245,000 Initial investment: Expected Cash in-flow Year 1: Expected Cash in-flow Year 2: Expected Cash in-flow Year 3: Present Value Factor of 1 at 9%: n=1: 0.91743 n=2: 0.84168 n=3: 0.77218 40) Choose from one of the following that accurately depicts this decision: A) This investment should not be considered because NPV is a negative $62,048 B) This învestment should be considered because NPV equals positive $62,048 C) This investment should be considered because the IRR for this investment is obviously less than its Required Rate of Return D) B and Care both correct
Consider a project with the following cash flows in dollars ($): Year Cash Flow0 -15,0001 50002 50003 50004 5000 Assume the appropriate discount rate for this project is 12%. What is the payback period for this project? (Round your answer to the tenths.)
calculate cash flow if NPV = Initial Investment 0, Period 2000000 = 10 years, discounted rate = 12%,
An investment will provide the following future cash flows. Year 1 = 5,919 Year 2 = 8,327 Year 3 and 4 = 4,718 Year 5 = 3,048 Using a 9.01% discount rate, what is the present value of this investment?
CONSIDER THE FOLLOWING PROJECT CASH FLOW. YEAR CASH FLOW 0 -1000 1 500 2 500 3 500 4 500 5 500 Calculate the Net Present Value of this project at a discount rate of 30% 50% WITH WORKING PLEASE
The following are a project's cash flows. Its cost of capital is 10% . What is the project's discounted payback? Year 0 1 2 3 Cash flows −$900 $500 $500 $500
7
Mendez Company has identified an investment project with the following cash flows. Year Cash Flow 1 $ 810 2 1,110 3 1,370 4 1,500 a. If the discount rate is 11 percent, what is the present value of these cash flows? b. If the discount rate is 17 percent, what is the present value of these cash flows? c. If the discount rate is 25 percent, what is the present value of these cash flows?
Myca Corporation has a project with the following cash flows. What is the value of1. the cash flows today assuming an annual interest rate of 10 percent? Year Cash Flow 1 $1,820 2 2,300 3 2,640 4 2,650
A project has the following cash flow n 0 1 2 3 Cash flow -25,000 0 X X What is the value of X that will result in 15% rate of return?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS