Light Sweet Petroleum, Inc., is trying to evaluate ageneration project with the following cash flows:Year Cash Flow$ -32,000,000O1$ 63,000,0002$ -16,000,000What is/are the IRR(s) of this project?-82.94%, -77.94%-77.94%, 39.48%-70.32%, 20.32%-70.05%, 66.92%66.92% only

Light Sweet Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year Cash Flow $ -32,000,000 1 $ 63,000,000 2 $ -16,000,000 What is/are the IRR(s) of this project? -82.94%, -77.94% -77.94%, 39.48% -70.32%, 20.32% -70.05%, 66.92% 66.92% only

Light Sweet Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year Cash Flow $ -32,000,000 1 $ 63,000,000 2 $ -16,000,000 What is/are the IRR(s) of this project? -82.94%, -77.94% -77.94%, 39.48% -70.32%, 20.32% -70.05%, 66.92% 66.92% only

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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A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 1 2 3 4 Project S -$1,000 $870.95 $260 $5 $10 Project L -$1,000 $5 $260 $400 $803.94 The company's WACC is 8.0%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places. %
Belgravia Petroleum Inc. is trying to evaluate a generation project with the following cash flows: Year Cashflow 0 -$300,000,000 1 $63,000,000 2 $85,000,000 3 -$50,000,000 4 $145,000,000 5 $175,000,000 6 -$50,000,000 7 $70,000,000 8 $72,000,000 Construct a spreadsheet and calculate the following (the required rate of return is 12%): Payback period Discounted payback period Internal rate of return (IRR) Modified IRR The discounting approach The reinvestment approach The combination approach Net present value (NPV) Based on your analysis, should the company take the project? Why?
A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 1 2 3 4 Project S -$1,000 $875.58 $260 $10 $15 Project L -$1,000 $0 $250 $380 $843.71 The company's WACC is 10.0%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.
A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: Project S Project L 0 % 1 2 3 4 $879.45 $250 $10 -$1,000 -$1,000 $0 $15 $420 $260 $734.66 The company's WACC is 9.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.
Please answer both questions, thanks
A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 % 1 2 3 4 Project S -$1,000 $872.78 $250 $15 $15 $783.02 Project L -$1,000 $5 $240 $420 The company's WACC is 9.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.
A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 1 2 3 4 Project S -$1,000 $884.00 $250 $15 $15 Project L -$1,000 $0 $250 $400 $805.87 The company's WACC is 9.0%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places. ___%
A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 1 2 3 4 Project S -$1,000 $894.60 $240 $15 $15 Project L -$1,000 $0 $250 $380 $836.66 The company's WACC is 8.0%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places. %
A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 1 2 3 4 Project S Project L -$1,000 $880.64 $260 $5 $15 -$1,000 $5 $250 $400 $823.57 The company's WACC is 9.0%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places. %
PharmPic is considering the following project with the following cash flows: PharmPic Project Period Cash Flow 0 -$50,000 1 -$7,000 2 -$40,000 3 $10,000 4 $5,000 5 $20,000 6 $25,000 7 $32,000 8 $37,000 DosageDoc is considering the following project with the following cash flows: DosageDoc Project Period Cash Flow 0 -$50,000 1 70,000 2 -40,000 3 30,000 4 -7,000 PharmPic Project’s cash flows are semi-annually. PharmPic has the following two financing choices; loan with an APR of 6.5% compounding semi-annually or a loan with an APR of…
Pet World is considering a project that has the following cash flow data. Year Cash flows 0 -$9,500 1 2 3 4 $2,000 $2,025 $2,050 $2,075 $2,100 If the required rate of the return on similar projects is 3%, the firm should IRR is 5 this project because its accept; 2.31% reject; 2.57% reject; 2.82% reject; 2.08% accept; 3.10%
Phoenix Company is considering investments in projects C1 and C2. Both require an initial investment of $222,000 and would yield the following annual net cash flows. (PV of $1. EV of $1. PVA of $1, and EVA of $1) Note: Use appropriate factor(s) from the tables provided. Net cash flows Year 1 Year 2 Year 3 Totals Project C1 $ 10,000 106,000 166,000 $ 282,000 Project C2 $ 94,000 94,000 94,000 $ 282,000 a. The company requires a 12% return from its investments. Compute net present values using factors from Table B.1 in Appendix B to determine which projects, if any, should be accepted. b. Using the answer from part a, is the internal rate of return higher or lower than 12% for (i) Project C1 and (ii) Project C2? Hint: It is not necessary to compute IRR to answer this question. Complete this question by entering your answers in the tabs below. Required A Required B The company requires a 12% return from its investments. Compute net present values using factors from Table B.1 in Appendix B…

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