32Anderson International Limited is evaluating a project in Erewhon. The project will create thefollowing cash flows:YearCash Flow-$1,275,000435,000505.000415,000345,000In an attempt to improve its economy, the Erewhonian government has declared that all cashflows created by a foreign company are "blocked" and must be reinvested with thegovernment for one year. The reinvestment rate for these funds is 4%. If the Anderson uses arequired return of 12% on this project, should you accept the project or not?O Yes, because the IRR 15.18% 12% as the required returnO No, because the IRR 10.29% 12% as the required returnO Yes, because the 12% required return > 10.29% of IRRO Yes, because the IRR 13.18% 12% as the required return

Internal rate of return:The internal rate of return (IRR) is a crucial financial metric used to…

Answered: In an attempt to improve its economy,…

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

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Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash Flow -$590,000 0 1 2 √34 3 220,000 163,000 228,000 207,000 All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are "blocked" and must be reinvested with the government for one year. The reinvestment rate for these funds is 7 percent. Assume Anderson uses a required return of 13 percent on this project. a. What is the NPV of the project? (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.) b. What is the IRR of the project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. b. X Answer is complete but not entirely correct. NPV IRR $ 17,315.59 x 14.40 × %
1. what amount should be used as the initial cash flow for this project and why?? 2. What is the after-tax salvage value for the spectrometer? 3. What is the MPV of the project? Should the firm accept or reject this project?
Overall, you should find conflicting recommendations based on the various criteria. Why is this occuring?
In this question they say that lenders would need a promised payment of 80 million. How is this solved for in question d. How can i derive this mathmatically
answer need..
Kara, Incorporated, imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. Year Cash Flow (A) -$ 59,000 Cash Flow (B) 01234 24,000 31,400 26,000 12,000 -$ 104,000 26,000 31,000 28,000 236,000 a. What is the payback period for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b. Which, if either, of the projects should the company accept? a. Project A years Project B years b. Project acceptance Accept Project A and reject Project B
need both
Question 4. IBM is evaluating a project in Eutopia. The project will create the following cash flows: Year $ 0 -1,330,000 1 250,000 2 470,000 3 450,000 4 215,000 5 95,000 All cash flows will occur in Eutopia and are expressed in dollars. In an attempt to improve its economy, the Eutopia’s government has declared that all cash flows created by a foreign company are “blocked” and must be reinvested with the government for one year. The reinvestment rate for these funds is 3.5 percent. If Anderson uses a required return of 12 percent on this project, what are the NPV and IRR of the project? Is the IRR you calculated the MIRR of the project? Why or why not?
provide. Answer please
The Klingon Sausage Corporation is trying to choose between the following two projects: Year Cash Flow (Project I) Cash Flow (Project II) 0 -$363,000 -$165,000 1 184,800 99,600 2 184,800 99,600 3 184,800 99,600 The discount rate of both projects is 8%. Klingon’s manager believes the company has sufficient resources so that the two projects should not be treated as mutually exclusive. Which project should be taken based on the profitability index? A. Project I should be accepted and project II should be rejected. B. None of the projects should be accepted. C. Project I should be rejected and project II should be accepted. D. Both projects should be accepted.
Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash Flow -$590,000 O 1 2 3 4 220,000 163,000 228,000 207,000 All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are "blocked" and must be reinvested with the government for one year. The reinvestment rate for these funds is 7 percent. Assume Anderson uses a required return of 13 percent on this project. a. What is the NPV of the project? (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.) b. What is the IRR of the project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Havana, Inc. has identified an investment project with the following uneven cash flows: $0 at Year 0, $950 at Year 1, $1,180 at Year 2, $1,400 at Year 3, and $2,140 at Year 4. Assume the discount rate is 8 percent, what is the future value of these cash flows in Year 4? a) $4,167.62 b) $6,123.60 c) $5,670.00 d) $6,225.08

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