EX2-3 (Algo) A five-year project has... five-year project has a projected net cash flow of $22,000 in year 1, $27,000 in year 2, $29,000 in year 3, $15,000 in year 4, and 514,000 in year 5. It will cost $50,000 to implement the project. If the required rate of return is 40 percent, conduct a discounted cash low calculation to determine the NPV. (Round your answer to nearest dollar amount. Negative amount should be indicated by a minus sign.) The NPV for the project is

EX2-3 (Algo) A five-year project has... five-year project has a projected net cash flow of $22,000 in year 1, $27,000 in year 2, $29,000 in year 3, $15,000 in year 4, and 514,000 in year 5. It will cost $50,000 to implement the project. If the required rate of return is 40 percent, conduct a discounted cash low calculation to determine the NPV. (Round your answer to nearest dollar amount. Negative amount should be indicated by a minus sign.) The NPV for the project is

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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Compute the payback statistic for Project A if the appropriate cost of capital is 7 percent and the maximum allowable payback period is four years. (Round your answer to 2 decimal places.) Project A Time: 0 1 2 3 4 5 Cash flow: −$1,100 $390 $510 $540 $320 $120 Should the project be accepted or rejected?multiple choice accepted rejected
am.401.
3) Consider the following two projects: Net Cash Flow Each Period Initial Outlay 1 2 3 4 Project A $4,000,000 $2,003,000 $2,003,000 $2,003,000 $2,003,000 Project B $4,000,000 0 0 0 $11,000,000 Calculate the net present value of each of the above projects, assuming a 14 percent discount rate. What is the internal rate of return for each of the above projects? Compare and explain the conflicting rankings of the NPVs and IRRs obtained in parts a and b above. If 14 percent is the required rate of return, and these projects are independent, what decision should be made? If 14 percent is the required rate of return, and the projects are mutually exclusive, what decision should be made?
Carland, Incorporated, has a project available with the following cash flows. If the required return for the project is 7.9 percent, what is the project's NPV? Year Cash Flow 0 -$ 258,000 1 66, 300 2 90, 400 3 117,800 4 70,900 5-12,000 $35, 378.61 $18, 968.78 $27, 173.69 $15, 173.69 $13,276.98
es Assume an investment has cash flows of -$105,000, $140,000, $200,000, and $485,000 for Years 0 to 3, respectively. What is the NPV if the required return is 13.5 percent? Should the project be accepted or rejected? Multiple Choice $501,656; reject $533,466; accept $505,307; reject
ces Duo Corporation is evaluating a project with the following cash flows: Year 0 Cash Flow -$ 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 %
N2. Account
A project has an initial cost of $35,000 and produces cash flows of $20,000, $15,000, $10,000, and $5,000 over the next four years, respectively. The project requires a 13 percent rate of return and has a required discounted payback period of three years. Should the project be accepted? Why or why not?
Green Submarine has a project with the following cash flows: Year Cash Flows −$ 17,300 1 6,530 2 11,000 3 7,510 4 −2,500 The discounting rate is 8 percent and the reinvestment rate is 10 percent. What is the MIRR for this project using the combination approach?
s

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