Consider the following two projects:ProjectYear 0Cash Flow- 100- 73A50B30The net present value (NPV) of project A is closest toOA. 22.9B. 18.3Year 1Year 2Year 3Cash Flow Cash Flow Cash FlowC. 45.7D. 20.140306030Year 4Cash FlowN/A30DiscountRate0.120.12

The net present value(NPV) of the project is calculated using following equationWhere, CF0 is the…

Answered: Consider the following two projects:…

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

Similar questions

A project has the following cash flows: Cash Year Flow 16,300 1 7,000 8,300 6,800 2 3 a. What is the NPV at a discount rate of zero percent? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the NPV at a discount rate of 12 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the NPV at a discount rate of 19 percent? (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.) d. What is the NPV at a discount rate of 28 percent? (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.) а. NPV b. NPV C. NPV NPV
a) b) Consider the following two projects: Project A B Year 0 Cash Flow -100 -73 17.3% C. d. Year 1 Cash Flow 40 30 a. 30 percent. b. 20 percent. 0 percent. 10 percent. Year 2 Cash Flow What is the incremental IRR of Project B over Project A? a. 12.6% b. 23.3% C. 1.7% d. 50 30 Year 3 Cash Flow 60 30 Year 4 Cash Flow N/A 30 Discount Rate If the standard deviation of returns on the market is 20 percent, and the beta of a well- diversified portfolio is 1.5, calculate the standard deviation of this portfolio. .15 .15
Fernando Designs is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? WACC: 10.75% Year 0 1 2 3 Cash flows - $800 $510 $510 $510 a. 2.18 years b. 1.10 years c. 2.82 years d. 1.82 years e. 1.18 years
The following are the cash flows of 2 projects Year 0, Project A $340, Project B $340 Year 1, Project A $170, Project B $240 Year 2, Project A $170, Project B $240 Year 3, Project A $170, Project B $240 Year 4, Project A $170, Project B Calculate the NPV for both projects if the discount rate is 10% Project A - NPV? Project B - NPV? Suppose that you have can choose only one of these projects. Which would you choose? Project A, B, or niether?
Problem 7: NPV versus IRR. Consider the following two mutually exclusive projects: Year Cash flow Cash flow (X) (Y) O 1 2 3 -9500 5800 4000 4000 PART 7A: The NPV for X is $ Answer: 2083.77 -9500 3500 5000 6000 if the required rate of return is 10%.
There is a project with the following cash flows : Year 0 1 2 1345 Cash Flow -$ 23,350 6,300 7,400 8,450 7,350 5,900 What is the payback period?
Hansaben
Consider the following information: Cash Flows ($) Project C0 C1 C2 C3 C4 A –5,300 1,300 1,300 2,700 0 B –700 0 600 2,300 3,300 C –5,200 3,400 1,700 800 300 a. What is the payback period on each of the above projects? (Round your answers to 2 decimal places.)
Consider the following two projects with cash flows in $: Project Year 0 Year 1 Year Year 3 Year 4 Discount Rate A - 100 40 50 60 n/a 0.15 B -73 30 30 30 30 0.15 For Project A, after two years, the project has been paid off for $90 out of $100. To find out the fraction of the third year, we take the $10 yet to be paid and divide it by $60, which is $10/$60 = 0.167. Therefore, the payback period for Project A is 2.167 years. Following the same logic, calculate the payback period for Project B.
What is the net present value of a project with the following cash flows if the discount rate is 15 percent? Year 0: Cash Flow 5-48,000, Year 1: Cash flow = $15,600, Year 2: Cash flow = $28,900, Year 3: Cash flow = 515, 200 Seleccione una: A. -$1,618.48 B. $1,035.24 C. S9.593.19 D $2,687.98 E. $1,044.16
Yellow Day has a project with the following cash flows: Year 0 1 2 Cash Flows -$ 26, 200 10,150 17,100 9,240 -3,200 What is the MIRR for this project using the reinvestment approach? The interest rate is 7 percent. 4 Multiple Choice 10.24% 14.50% 8.54% 11.39% 13.29%
N2. Account

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

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

Consider the following two projects: Year 0 Year 1 Year 2 Year 3 Cash Flow Cash Flow Cash Flow Cash Flow Project A B 30 The net present value (NPV) of project A is closest to O A. 22.9 O B. 18.3 C. 45.7 D. 20.1 - 100 - 73 40 30 50 60 30 Year 4 Cash Flow N/A 30 Discount Rate 0.12 0.12