Philnet Inc. is considering a project that has the following after-tax operating cash flows (in millions of dollars): Project Year Cash Flows -$300 1 125 75 200 4 100 Philnet Inc's finance department has concluded that the project has a 10 percent cost of capital. What is the project's discounted payback period? O 2.65 years O 2.50 years O 2.00 years O 2.83 years O 3.00 years 2.

Philnet Inc. is considering a project that has the following after-tax operating cash flows (in millions of dollars): Project Year Cash Flows -$300 1 125 75 200 4 100 Philnet Inc's finance department has concluded that the project has a 10 percent cost of capital. What is the project's discounted payback period? O 2.65 years O 2.50 years O 2.00 years O 2.83 years O 3.00 years 2.

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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Suppose you have the following information for a project. Year Before-Tax Income After-Tax Cash Flows Taxes Cash Flows 0 12345 -1000 500 340 244 100 100 -72 -33.6 -10.56 24 24 Calculate the present worth of after-tax cash flows. Use an interest rate of 8%. Round your answer to 2 decimal places.
A firm is considering a project with an annual cash flow of $200,000. The project would have a 7-year life, and the company uses a discount rate of 10 percent. Ignoring income taxes, what is the maximum amount the company could invest in the project and have the project still be acceptable? a. $973,600 b. $718,200 c. $200,000 d. $1,400,000 Please donot give answer in image format and it should be in step by step format and provide fast solution
What is the IRR for the following project if its initial after-tax cost is R5 000 000 and it is expected to provide after-tax operating cash inflows of R1 800 000 in year 1, R1 900 000 in year 2, R1 700 000 in year 3 and R1 300 000 in year 4? What is the correct answer? A. 15.57% B. 0.00% C. 13.57% D. None of the above
BECL Ltd is considering a project, which will involve the following cash inflows and (out)flows: $000 Initial Outlay (400) After 1 year 40 After 2 years 300 After 3 years 300 What will be the NPV (net present value) of this project if a discount rate of 15% is used? a. -$60.8k b. $460.8k c. $240k d. $60.8k
4. Fer Designs is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? The WACC is 9%. Cash flow from project -$1,000 $400 $100 $800 Year 0 123
The following information will be used to answer questions 8, 9, and 10. Your company can invest in 1 of the following projects: Cash Flows Year Project A Project B 0 -70.000 -65.000 1 30.000 8.000 2 10.000 8.000 3 10.000 8,000 4 18.000 9.000 O 5.000 30.000 6 4.000 40.000 The interest rate is 8%. 8a. What is the payback period for each project? 8b. If you base your decision on which project has the shortest payback, which will you choose?
ABC Co. is considering a project that has the following cash flow What is the project's data. payback? Year 1 2 3 4 5 Cash flows -$1,150 $300 $310 $320 $330 $240 XYZ Co. is considering a project that has the following cash flow and interest rate. What's the project's discounted payback? Interest rate: 10.00% Year 1 2 3 Cash flows -$850 $360 $480 $600 3 A firm is considering Projects S and L, whose cash flows are shown below. Which project has a higher NPV, by how much? Interest rate: 10.00% Year 1 2 3 4 -$1,100 $380 $380 CFs $380 $380 -$2,000 $765 $765 CF, $765 $765 FMA Co. analyzed the project whose cash flows are shown below. 4 However, before the decision to accept or reject the project, the Federal Reserve took actions that changed interest rates and therefore the firm's interest rate. The Fed's action did not affect the forecasted cash flows. By how much did the change in the interest rate affect the project's fo: NDV2 Should the nro:
Compute the payback statistic for Project A if the appropriate cost of capital is 7 percent and the maximum allowable payback period is four years. (Round your answer to 2 decimal places.) Project A Time: 0 1 2 3 4 5 Cash flow: −$1,400 $510 $600 $600 $380 $180 Payback years: _______.__
XYZ is evaluating a project that would last for 3 years. The project's cost of capital is 15.60 percent, its NPV is $43,200.00 and the expected cash flows are presented in the table. What is X? Years from today 0 1 2 3 Expected Cash Flow (in $) -55,800 71,000 -15,900 X O An amount less than $43,200.00 or an amount greater than $82,666.00 O An amount equal to or greater than $70,205.00 but less than $82,666.00 O An amount equal to or greater than $60,505.00 but less than $70,205.00 O An amount equal to or greater than $53,257.00 but less than $60,505.00 O An amount equal to or greater than $43,200,00 but less than $53,257.00 M
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ABC is considering investing in a project that has an initial cost of $560,000. The project will earn unlevered free cash flows (FCFF) of $96, 000 per year in perpetuity. The unlevered cost of capital is 20% and the tax rate is 40%. What is the NPV of the unlevered project? Group of answer choices $400,000 $80, 000 $480,000 $80, 000
Duo Corporation is evaluating a project with the following cash flows: Year 0 PO12345 Cash Flow -$ 29,300 11,500 14,200 16,100 13,200 -9,700 The company uses a discount rate of 11 percent and a reinvestment rate of 8 percent on all of its projects. a. Calculate the MIRR of the project using the discounting approach. (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the MIRR of the project using the reinvestment approach. (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. Calculate the MIRR of the project using the combination approach. (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Discounting approach MIRR b. Reinvestment approach MIRR c. Combination approach MIRR % % %

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