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%
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- The cash flows associated with an investment project are as follows: Year Project Y 0 (40 000) 1 10000 2 10000 3 15000 4 20000 The required return is 5 percent. Reinvestment rate 6%. What’s the discount payback period of the projects? (compile a spreadsheet) Calculate NPV, PI, IRR , MIRR of a projects Should the firm accept the project?You are evaluating a project. The cash flow of this project is as follows: Year Cash Flow0 -$100,0001 45,0002 52,0003 43,000 Suppose you use the NPV decision rule. At a required rate of 11 percent, should you accept this project? Group of answer choices Accept it because NPV is $14,186.14 Accept it because NPV is $12,186.14 Reject it because NPV is -$14,186.14 Do not know because we cannot figure out NPV with the conditions given.Bluekettle Inc. is considering a project that has the following cash. What is the project's NPV(net present value) if you use a required rate of 14% ? If the NPV is negative, put the minus sign in front of your answer, such as -200.56. Note that a project's projected NPV can be negative, in which case it will be rejected. Year 0 1 2 3 Cash flows - $6,500 $1,600 $3,700 $7,500
- BATA plc. is considering the following two projects. Only one of which maybe selected. Each project has a required rate of return of 15% for A and 10% for B with the following cash flowsYear Project A Project B0 K (200,000) K (175,000)1 68,700 50,0002 44,500 60,2503 56,500 45,2504 35,500 80,250Required:A. Calculate for each project:Payback period for each of the projects, Net present value for each of the projects and Internal rate of return for each of the projectsB. Explain which project you would recommend for acceptance for each of the three methods and overall. C. Briefly discuss the relative merits of the pay back and net present value methods of evaluation methods mentioned in (a) aboveViva's Junkshop is considering a project that has the following cash flow and WACC data. What is the project's NPV? WACC: 10.00% Year 0 1 2 3 Cash flows -$1,050 $450 $460 $470 Choices are the ff: A.$ 92.37 B. $96.99 C. $101.84 D. $112.28 E. $106.93Cute Camel Woodcraft Company is analyzing a project that requires an initial investment of $400,000. The project's expected cash flows are: Year Year 1 Year 2 Year 3 Year 4 Cute Camel Woodcraft Company's WACC is 8%, and the project has the same risk as the firm's average project. Calculate this project's modified internal rate of return (MIRR): O 27.56% O26.25% 28.88% Cash Flow $325,000 -175,000 475,000 475,000 O 23.63%
- Barry Inc. is considering a project that has the following cash flow and WACC data. What is the project's MIRR?WACC = 11.55% Year 0 1 2 3 4 5 CFs -$46,900 10,800 21,600 32,400 43,200 54,000 Group of answer choices 25.42% 31.53% 32.18% 39.58% 38.29%Consider the following cash flows:Year Cash Flow0 -$8,0001 $3,0002 $3,6003 $2,7004 $2,5005 $2,1006 $1,600 1. NPV. Using a 10% required rate of return, calculate the NPV for this project. Should it be accepted or rejected? 2. PI. Calculate the Profitability Index (PI) for this project. Should it be accepted or rejected?Ehrmann Data Systems is considering a project that has the following cash flow and WACC data. What is the project's MIRR? Note that a project's projected MIRR can be less than the WACC (and even negative), in which case it will be rejected. WACC: 10.00% Year Cash flows 10.32% 11.35% 12.50% O 13.78% O 14.20% 0 -$2,000 1 $800 2 $800 3 $1,000
- Anderson Systems is considering a project that has the following cash flow and WACC data. What is the project's NPV?Note that if a project's projected NPV is negative, it should be rejected. WACC: 9.00%.Year 0 1 2 3Cash flows −$1,000 $500 $500 $500Cornell Enterprises is considering a project that has the following cash flow and WACC data. What is the project's NPV?Note that a project's projected NPV can be negative, in which case it will be rejected. WACC: 10.00%Year 0 1 2 3Cash flows −$1,050 $450 $460 $470Project A and B have a cost of OMR (700). Each project generates cash flows as seen in the below table, According to the payback period method and in the line of risk and liquidity preference, answer the following:- (Hint:- Your answer must be not random.) which is the project you will select? Justfy your decision. End-of- Year Cash Flow Project 1 2 3 A 500 300 100 B 400 450 100