Marielle Machinery Works forecasts the following cash flows for a project under consideration. It uses the Internal rate of return rule toaccept or reject projects.C₁Co-$ 10,000C₂+$ 7,500IRRa. What is the project's IRR?Note: Do not round Intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.C3+$ 8,50022.41 %b. Should this project be accepted if the required return is 12%?YesNo

YearsCash flow0-$10,0001$02$7,5003$8,500Yes, the project should be accepted if the required rate is 12% because the IRR of 20.61% is greater than the required return of 12%. The IRR of the project = 20.61%Yes, project should be accepted if the required rate is 12%.

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Finance

Marielle Machinery Works forecasts the following cash flows for a project under consideration. It uses the Internal rate of return r accept or reject projects. C Co -$ 10,000 IRR C2 +$ 7,500 a. What is the project's IRR? Note: Do not round Intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. 22.41 03 +$ 8,500 b. Should this project be accepted if the required return is 12%?

Marielle Machinery Works forecasts the following cash flows for a project under consideration. It uses the Internal rate of return r accept or reject projects. C Co -$ 10,000 IRR C2 +$ 7,500 a. What is the project's IRR? Note: Do not round Intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. 22.41 03 +$ 8,500 b. Should this project be accepted if the required return is 12%?

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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Nile Inc. wants to choose the bettter of two mutually exclusive projects that expand warehouse capacity. The projects cash flows are shown in the following table attached. The cost of capital is 14% a. Calculate the IRR for each of the projects . Assess the acceptabiity of each project on the basis of the IRRs. b. Which project is preferred?
Assume an investment has cash flows of -$25, 200, $7,000, $8,000, $8,500, and $9,000 for Years 0 to 4, respectively. What is the NPV if the required return is 12 percent? (do not round intermediate calculations, enter negative number with a minus sign and round your answer to 2 decimal places, e.g., -32.16.) Should the project be accepted or rejected? (write either "accepted" or "rejected")
2
Radubhai
The Weiland Computer Corporation is trying to choose between the following mutually exclusive design projects, P1 and P2:Year 0123 Cash flows (P1) -$53,000 27,000 27,000 27,000 Cash flow (P2) -$16,000 9,100 9,100 9,100a. If the discount rate is 10 percent and the company applies the profitability index (PI) decision rule, which project should the firm accept?b. If the firm applies the Net Present Value (NPV) decision rule, which project should it take?c. Are your answers in (a) and (b) different? Explain why?
A project has the following cash flows: 0 1 2 3 4 5 -$600 $205 -$X $189 $380 $499 This project requires two outflows at Years 0 and 2, but the remaining cash flows are positive. Its WACC is 12%, and its MIRR is 14.72%. What is the Year 2 cash outflow? Enter your answer as a positive value. Do not round intermediate calculations. Round your answer to the nearest cent. $ ___
Consider the following projects: Cash Flows ($) Project D E CO00 C101 -11,700 23,400 -21,700 37,975 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 12%. a. Calculate the profitability index for each project. b-1. Calculate the profitability-index using the incremental cash flows. b-2. Which project should you choose?
A project under consideration has the following cash flows: Cash Year Flow 0 $27,300 1 11,300 2 14,300 3 10,300 What is the NPV for the project if the required return is 10 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV At a required return of 10 percent, should the firm accept this project? No Yes What is the NPV for the project if the required return is 26 percent? (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.) NPV At a required return of 26 percent, should the firm accept this project? Yes
You are given the following information about the cash flows for Projects A and B: Project B $12,643.00 $6,264.00 $5.119.00 $4,284.00 $3,265.00 $2,884.00 Year 0 1 2 3 4 5 Given this information, and assuming a risk-adjusted discount rate of 14.0 percent for both projects, determine the internal rate of return (IRR) for the project with the highest net present value (NPV). 26.0818% 25.6301% 25.1784% Project A -$10,356.00 $2,185.00 $4,294.00 $4,642.00 $6,360.00 $3,125.00 O24.2750%
You are offered the chance to participate in a project that produces the following cash flows: Co C₁ C₂ +$ 6,500 +$ 4,750 -$ 14,000 The internal rate of return is 14.7%. a. If the opportunity cost of capital is 14%, what is the net present value of the project? Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places. Answer is complete but not entirely correct. Net present value $ b. Will you accept the offer? Yes No 43.77 X
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