Current Attempt in Progress4.Management of Ivanhoe Measures, Inc., is evaluating two independent projects. The company uses a 13.00 percent discount rate forsuch projects. The costs and cash flows for the projects are shown in the following table.YearProject 1Project 20-$9,242,840-$12,271,20013,483,4002,301,33021,808,2903,908,80031,297,6003,003,09041,168,9004,434,31051,271,3804,140,78061,693,94071,479,290What are their NPVS? (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors. Round other intermediatecalculations and final answer to O decimal places, e.g. 1,525.)The NPV of Project 1 is $, and the NPV of Project 2 is $eTextbook and MediaSave for LaterUsing multiple attempts will impact your score.20% score reduction after attempt 2SearchAttempts: 0 of 3 used Submit Answer

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Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter13: Capital Budgeting: Estimating Cash Flows And Analyzing Risk

Section: Chapter Questions

Problem 2P

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Management of Wildhorse Measures, Inc., is evaluating two independent projects. The company uses a 10.8 percent discount rate for such projects. The costs and cash flows for the projects are shown in the following table. Year Project 1 Project 2 0 - $8,725,375 -$12,004,147 1 2,913,790 2,073,130 2 1,897,590 3,504,990 3 1,455,000 3,349,180 4 1,137,000 3,776,400 5 1,249,380 4,134,080 6 1,594,740 7 1,304,690 a. What are the IRRs for the projects? (Round answers to 3 decimal places, e.g. 15.257%.) The IRR of Project 1 is %, and the IRR of Project 2 is %. b. Does the IRR criterion indicate a different decision than the NPV criterion?
Management of Ivanhoe Measures, Inc., is evaluating two independent projects. The company uses a 13 percent discount rate for such projects. The costs and cash flows for the projects are shown in the following table. Year Project 1 Project 2 0 $8,812,840 -$10,781,200 1 3,363,400 2,021,330 2 1,788,290 3,848,800 3 1,367,600 3,173,090 4 1,088,900 4,104,310 5 1,111,380 4,130,780 6 1,723,940 7 1,319,290 k A What are their NPVs? (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to O decimal places, e.g. 1,525.) Q Ac The NPV of Project 1 is $ and the NPV of Project 2 is $ Qu Mu
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Carla Vista Industries is expanding its product line and its production capacity. The costs and expected cash flows of the two independent projects are given in the following table. The firm uses a discount rate of 12.38 percent for such projects. Year Product Line Expansion 0 1 2 3 4 5 -$2,803,700 8,551,900 952,200 952,200 952,200 952,200 Production Capacity Expansion NPV of product line expansion is NPV of production capacity expansion is $ -$8,666,000 LA 1,924,100 1,924,100 a. What are the NPVs of the two projects? (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to O decimal places, e.g. 1,525.) 1,924,100 4,548,500 4,548,500 1
Duo Corporation is evaluating a project with the following cash flows: Year Cash Flow -$ 29,800 012345 12,000 14,700 16,600 13,700 -10,200 The company uses a discount rate of 13 percent and a reinvestment rate of 6 percent on all of its projects. a. Calculate the MIRR of the project using the discounting approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the MIRR of the project using the reinvestment approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. Calculate the MIRR of the project using the combination approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Discounting approach MIRR b. Reinvestment approach MIRR c. Combination approach MIRR % % %
ces Duo Corporation is evaluating a project with the following cash flows: Year 0 Cash Flow -$ 29,100 -2345 1 11,300 14,000 15,900 13,000 -9,500 The company uses a discount rate of 12 percent and a reinvestment rate of 7 percent on all of its projects. a. Calculate the MIRR of the project using the discounting approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the MIRR of the project using the reinvestment approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. Calculate the MIRR of the project using the combination approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Discounting approach MIRR b. Reinvestment approach MIRR % c. Combination approach MIRR %
Cullumber Corp. management is evaluating two independent projects. The costs and expected cash flows are given in the following table. The cost of capital is 13.73 percent. Year 0 1 2 3 4 5 Project A - $287,839 109,300 109,300 109,300 109,300 109,300 Project B - $401,058 The NPV of project A is $ There is The IRR of Project A is a. Calculate the projects' NPV. (Enter negative amounts using negative sign e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525.) 138,190 Cullumber should choose 162,830 b. Calculate the projects' IRR. (Round answer to 2 decimal places, e.g. 15.25%.) Cullumber should choose 179,500 118,800 119,800 c. Which project should be chosen based on NPV? Based on IRR? Is there a conflict? and project B is $ % and Project B is will be accepted. ◆ based on NPV. based on IRR. between the NPV and IRR decisions. d. If you are the decision maker for the firm, which project or projects will be…
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Solo Corp, is evaluating a project with the following cash flows: Cash Flow -$28,200 10,400 Year 0 12440 3 5 13,100 15,000 12,100 8,600 The company uses a discount rate of 11 percent and a reinvestment rate of 8 percent on all of its projects. MIRR Calculate the MIRR of the project using the discounting approach. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) %

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