6. Calculate the net present value of the project assuming a sale in Year 10.7. Calculate the internal rate of return.Complete the following problems using the information given below:Total Project Cost:Lender Standards:$50,000,000Interest Rate:9%Amortization Rate:20 yrsDebt service coverage ratio:Debt to cost ratio:1.2570%o Projected annual cash flow of project:Investors' Hurdle Rate:$4,250,00012%Tax Rate:30%o Cap RateSale in Year 109%O O 0 0 O

Capital budgeting techniques are the decision making tools which helps the companies in making…

Complete the following problems using the information given below: o Total Project Cost: o Lender Standards: $50,000,000 Interest Rate: 9% Amortization Rate: 20 yrs Debt service coverage ratio: 1.25 Debt to cost ratio: 70% o Projected annual cash flow of project: Investors' Hurdle Rate: $4,250,000 12% Tax Rate: 30% Cap Rate Sale in Year 10 9%

Complete the following problems using the information given below: o Total Project Cost: o Lender Standards: $50,000,000 Interest Rate: 9% Amortization Rate: 20 yrs Debt service coverage ratio: 1.25 Debt to cost ratio: 70% o Projected annual cash flow of project: Investors' Hurdle Rate: $4,250,000 12% Tax Rate: 30% Cap Rate Sale in Year 10 9%

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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If the opportunity cost of capital of 4%, Following information relate to the cash flow of below three projects proposals. Project Year: 0 1 2 3 X -$40,000 +20,000 +18,000 +25,000 Y -$65,000 +15,000 +30,000 +35,000 Z -70000 25,000 25,000 30,000 ِِA.If the discount rate 4%, which project will be acceptable under the discount payback period? B. With help of scientific calculator or excel program, calculate the IRR for project X and Y?
time value of money practice example: Please show calcualtions/steps (excell or other format): a) Calculate PB, DPB, NPV, IRR and PI for the following project: - discount rate of 12% - initial investment = 750,000 - ncf yr 1 = 150,000 - ncf yr 2 = 300,000 - ncf yr 3 = 400,000 - ncf yr 4 = 250,000 - ncf yr 5 = 100,000
Talent Inc. is considering a project that has the following cash flow and WACC data.WACC: 7%Year 0 1 2 3Cash flows -$1,600 $500 $600 $700 (1) What is the project's NPV?(2) What is the project's IRR?(3) What is the project's Payback Period?(4) What is the project's Discounted Payback Period?
year payback period criteria and a required return of 12 percent. |Year Cash flow |(OMR) -26,000 18,000 10,000 7,000 -15,000 9,000 2 3 4 11. What is the net present value for the project? 12. What is the payback period for the project? 13. What is the discounted payback period for the project? 14. What is the profitability index for the project? 15. Given your analysis, should the fim accept or reject the projeet?
Required information The following data is provided for a PPP project. To the Government $1.8 milion naw and $200,000 every 3 years To the People Benefits $90,000 per year beginning now Cost $25,000 per year Savings $115,000 per year Disbenefits Calculate the conventional benefit/cost ratios using an interest rate of 7% per year and an infinite project period. The conventional B/C ratio is
A new project will have an intial cost of $14,000. Cash flows from the project are expected to be $-4,000, $6,000, $8,000, and $12,000 over the next 4 years, respectively. Assuming a discount rate of 12%, what is the project's IRR? Question 5 options: 12.61% 13.14% 13.66% 13.93% 13.40%
Calculating Discounted Payback An investment project has annual cash inflows of $5,000, $5,500, $6,000, and $7,000, and a discount rate of 12 percent. What is the discounted payback period for these cash flows if the initial cost is $8,000? What if the initial cost is $12,000? What if it is $16,000?
Based on the information below, calculate the adjusted present value (APV), given that the project lifespan is 1 year and is being financed by 30% debt: Investment at t=0 € 33,000 Cashflow after yr1 € 39,600 Cost of capital (COC) 53% Cost of debt 43% Tax 33% a) The adjusted present value (APV) is: €-4325.31 b) The adjusted present value (APV) is: €-5307.69 c) The adjusted present value (APV) is: €-7117.65 d) The adjusted present value (APV) is: €-6135.26
A proposed project is estimated to have the following cash, at 9% MARR 0 $900 1 $800 a. Using 7% interest rate, indicate the NPV of the investment. b. At 20%, indicate the NPV of the investment. 2 $700 3 $600 c. What is the IRR for this investment? Write answer in percentage value, up to 2 decimal places. 4 $500 $1500 $1500 $1500 $1500 5 6 7 8
Internal rate of return and modified internal rate of return. Quark Industries has three potential projects, all with an initial cost of $1,900,000. Given the discount rate and the future cash flow of each project, what are the IRRs and MIRRs of the three projects for Quark Industries? Cash Flow Project M Project N Project O Year 1 $500,000 $600,000 $1,000,000 Year 2 $500,000 $600,000 $800,000 Year 3 $500,000 $600,000 $600,000 Year 4 $500,000 $600,000 $400,000 Year 5 $500,000 $600,000 $200,000 Discount rate 9% 13% 16% What is the IRR for project M?
Finance
Give typing answer with explanation and conclusion A six-year project has an initial requirement of $308,000 for fixed assets and $22,750for net working capital. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $89,120 and the discount rate is 7.50 percent. What is the profitability index?

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