Lloyd Enterprises has a project which has the following cash flows: Cash Flow -$200,000 50,000 100,000 150,000 40,000 25,000 Year 0 OHNMIN 1 2 3 4 5 The cost of capital is 10 percent. What is the project's discounted payback? a. 1.8763 years b. 2.0000 years c. 2.3333 years d. 2.4793 years e. 2.6380 years

Lloyd Enterprises has a project which has the following cash flows: Cash Flow -$200,000 50,000 100,000 150,000 40,000 25,000 Year 0 OHNMIN 1 2 3 4 5 The cost of capital is 10 percent. What is the project's discounted payback? a. 1.8763 years b. 2.0000 years c. 2.3333 years d. 2.4793 years e. 2.6380 years

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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Consider a project with the following cash flows: Time 0 1 2 3 4 5 CF -$5,000 $5,000 $4,000 $2,000 $1,000 -$6,000 Please round your answer to two decimal places. (e.g. 12345.67 for $12,345.67; 12.34 for 12.34%) a) What is the NPV of this project if the cost of capital is 10%? b) To calculate the MIRR, find the modified cash flow at year 0 c) What is the MIRR of this project?
9. Consider the following two mutually exclusive projects: Project A Project B -$15,000 -$25,000 $5,000 $12,000 $8,000 n 10 $0 $X $X 3 PW (15%) ? $9,600 The firm's MARR is known to be 15%. Compute the PW (15%) for Project A. 10. In question 9, compute the unknown cash flow X in years 2 and 3 for Project B. 11. In question 9, which project would you select?
A project has the following cash flows: C * 0 = - 100000; C 1 = 50000 C * 2 = 150000 C 3 = 100000 . If the discount rate changes from 12 percent to 15 percent, what is the CHANGE in the NPV of the project ( approximately)? Multiple Choice 12,750 increase 12,750 decrease 14,240 increase 14,240 decrease
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Rubash Company is considering a project that has the following cash flow and WACC data. What is the project's MIRR? WACC = 9% Year: 0 1 2 3 Cash flows: - $1,500 $400 $525 $940 a. 8.00% b 8.45% c. 8.75% d. 9.33% e. 9.83%
Fernando Designs is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? WACC: 10.75% Year 0 1 2 3 Cash flows - $800 $510 $510 $510 a. 2.18 years b. 1.10 years c. 2.82 years d. 1.82 years e. 1.18 years
None
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 −$350,000 −$35,000 1 25,000 17,000 2 70,000 11,000 3 70,000 17,000 4 430,000 11,000 Assume you require a 15 percent return on your investment and a payback of 4 years. a. If you apply the discounted payback criterion, which investment will you choose? Why? b. If you apply the NPV criterion, which investment will you choose? Why? c. Based on your answers in (a) and (b), what you can say anything about the IRR of both projects? which project will you finally choose? Why?
Myca Corporation has a project with the following cash flows. What is the value of1. the cash flows today assuming an annual interest rate of 10 percent? Year Cash Flow 1 $1,820 2 2,300 3 2,640 4 2,650
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