26. A project has a contribution margin of $6. projected fixed costs of $10,000, a projected variablecost per unit of $12, and a projected present value break-even point of 6,000 units. What is theoperating cash flow at this level of output?$2.000$15.000$20. 000$26.000 24. A project will produce cash inflows of $1,750 a year for four years. The project initially costs$10,000 to get started. In year five, the project will be closed and as a result should produce acash inflow of $8,500. What is the net present value of this project if the required rate of return is10%?$1,474.76-$2.011405935.56$824.80

Note : As per the guidelines, only first question will be answered. Kindly post the remaining parts…

Answered: margin of $6, projected fixed cos ost…

margin of $6, projected fixed cos ost per unit of $ 12, and a projected present value break-eve perating cash flow at this level of output? $2.000

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

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.

Question

26. A project has a contribution margin of $6. projected fixed costs of $10,000, a projected variable
cost per unit of $12, and a projected present value break-even point of 6,000 units. What is the
operating cash flow at this level of output?
$2.000
$15.000
$20. 000
$26.000

24. A project will produce cash inflows of $1,750 a year for four years. The project initially costs
$10,000 to get started. In year five, the project will be closed and as a result should produce a
cash inflow of $8,500. What is the net present value of this project if the required rate of return is
10%?
$1,474.76
-$2.01140
5935.56
$824.80

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