Cornell Company is considering a project with an initial investment of $596,500 that is expected to produce cash inflows of $125,000 for nine years. Cornell's required rate of return is 12%. (Click on the icon to view Present Value of $1 table.) 14. 15. 16. (Click on the icon to view Present Value of Ordinary Annuity of $1 table.) What is the NPV of the project? What is the IRR of the project? Is this an acceptable project for Cornell? 14. What is the NPV of the project? (Enter the factor amount to three decimal places, X.XXX. Round the present value of the annuity to the nearest whole dollar. Use parentheses or a minus sign for a negativ net present value.) Years 1-9 0 Present value of annuity Investment Net present value Net Cash Annuity PV Factor Inflow (i=12%, n=9) Present Value 15. What is the IRR of the project? Start by calculating the Annuity PV factor. (Enter the factor amount to three decimal places, X.XXX.) Annuity PV factor The IRR of the project is 16. Is this an acceptable project for Cornell? ***

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
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Cornell Company is considering a project with an initial investment of $596,500 that is expected to produce cash inflows of $125,000 for nine years. Cornell's required rate of return is 12%.
(Click on the icon to view Present Value of $1 table.)
(Click on the icon to view Present Value of Ordinary Annuity of $1 table.)
14. What is the NPV of the project?
15. What is the IRR of the project?
16.
Is this an acceptable project for Cornell?
14. What is the NPV of the project? (Enter the factor amount to three decimal places, X.XXX. Round the present value of the annuity to the nearest whole dollar. Use parentheses or a minus sign for a negative
net present value.)
Years
1-9
0
Present value of annuity
Investment
Net Cash Annuity PV Factor
Inflow
(i-12%, n=9)
Net present value
15. What is the IRR of the project?
Start by calculating the Annuity PV factor. (Enter the factor amount to three decimal places, X.XXX.)
Annuity PV factor
The IRR of the project is
16. Is this an acceptable project for Cornell?
Present
Value
=
Transcribed Image Text:Cornell Company is considering a project with an initial investment of $596,500 that is expected to produce cash inflows of $125,000 for nine years. Cornell's required rate of return is 12%. (Click on the icon to view Present Value of $1 table.) (Click on the icon to view Present Value of Ordinary Annuity of $1 table.) 14. What is the NPV of the project? 15. What is the IRR of the project? 16. Is this an acceptable project for Cornell? 14. What is the NPV of the project? (Enter the factor amount to three decimal places, X.XXX. Round the present value of the annuity to the nearest whole dollar. Use parentheses or a minus sign for a negative net present value.) Years 1-9 0 Present value of annuity Investment Net Cash Annuity PV Factor Inflow (i-12%, n=9) Net present value 15. What is the IRR of the project? Start by calculating the Annuity PV factor. (Enter the factor amount to three decimal places, X.XXX.) Annuity PV factor The IRR of the project is 16. Is this an acceptable project for Cornell? Present Value =
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