Find the IRR for a project requiring an investment of GH¢100000 which is expected to produce cash flows of GH¢50000 at the end of year 1, GH¢30000 at the end of year 2, and GH¢50000 at the end of year 3.

Find the IRR for a project requiring an investment of GH¢100000 which is expected to produce cash flows of GH¢50000 at the end of year 1, GH¢30000 at the end of year 2, and GH¢50000 at the end of year 3.

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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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

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Find the IRR for a project requiring an investment of GH¢100000 which is expected to
produce cash flows of GH¢50000 at the end of year 1, GH¢30000 at the end of year 2,
and GH¢50000 at the end of year 3.

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A project is expected to generate the following cash flows: $1 million in one year, $3.7 million in two years, $4 million in three years and $4,3 million in four years. The cash flow is then expected to remain constant (54 3 million per year) in perpetuity. How much are you willing to invest in the project today if you want the project to have an internal Rate of Return (IRR) of 15% ?
Suppose you are evaluating a project with the cash inflows shown in the following table. Your boss has asked you to calculate the project’s net present value (NPV). You don’t know the project’s initial cost, but you do know the project’s regular, or conventional, payback period is 2.5 years. The project's annual cash flows are: Year Cash Flow Year 1 $325,000 Year 2 600,000 Year 3 300,000 Year 4 450,000 If the project’s desired rate of return is 9.00%, the project’s NPV is . (Hint: Round your calculations to the nearest dollar.)
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. calculate the net present value of the following: Project A requires an initial investment of $1,000 and is expected to generate cash flows of $400 per year for 3 years
Keane & Co plc is considering two possible investments. The company requires an Accounting Rate of Return of 12% and payback within 2 years. It has a cost of capital of 12%. Forecast sales and production units Year 1 Year 2 Year 3 Year 4 Contribution per unit Fixed cost per year Initial investment Residual (scrap) value Accounting Rate of Return Internal Rate Return Discount factors at 12% are: Year 1 Year 2 Year 3 Year 4 Year 5 0.893 0.797 0.712 0.636 0.567 Project J 60,000 110,000 80,000 50,000 £40 £800,000 £7,600,000 £300,000 9.5% 8% Project K 30,000 24,000 20,000 12,000 £120 £700,000 £5,500,000 £150,000 19% 18%
Project L requires an initial outlay at t = 0 of $74,734, its expected cash inflows are $13,000 per year for 11 years, and its WACC is 13%. What is the project's IRR? Round your answer to two decimal places
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(Related to Checkpoint 11.4) (IRR calculation) Determine the internal rate of return on the following project: An initial outlay of $9,500 resulting in a cash inflow of $1,600 at the end of year 1, $4,700 at the end of year 2, and $7,800 at the end of year 3. This project's internal rate of return is %. (Round to two decimal places.)
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