Problem 13-21 NPV (LG13-3)Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects ofthis risk class is 7 percent, and that the maximum allowable payback and discounted payback statistics for the project are 2.0 and 3.0years, respectively.Time:1Cash flow:-$7,400 $1,1702$2,37034$1,570 $1,5705$1,3706$1,170Use the NPV decision rule to evaluate this project. (Negative amount should be indicated by a minus sign. Do not roundintermediate calculations and round your final answer to 2 decimal places.)NPVShould it be accepted or rejected?acceptedO rejected

Npv is the difference between present value of cash inflows and the present value of cash outflows…

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects this risk class is 7 percent, and that the maximum allowable payback and discounted payback statistics for the project are 2.0 and 3.0 years, respectively. Time: 0 1 Cash flow: 3 -$7,400 $1,170 $2,370 $1,570 2 4 $1,570 $1,370 5 6 $1,170 Use the NPV decision rule to evaluate this project. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) NPV Should it be accepted or rejected? accepted O rejected

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects this risk class is 7 percent, and that the maximum allowable payback and discounted payback statistics for the project are 2.0 and 3.0 years, respectively. Time: 0 1 Cash flow: 3 -$7,400 $1,170 $2,370 $1,570 2 4 $1,570 $1,370 5 6 $1,170 Use the NPV decision rule to evaluate this project. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) NPV Should it be accepted or rejected? accepted O rejected

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 your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 9 percent, and that the maximum allowable payback and discounted payback statistics for the project are 35 and 45 years, respectively. Time: Cash flow: 2 4 -$5,100 $1,280 $2,48e $1, 680 $1,680 $1,489 $1, 250 Use the NPV decision rule to evaluate this project. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) NPV
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Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 11 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3 and 3.5 years, respectively. Time: Cash flow: 0 1 3 4 -$233,000 $65,600 $83,800 $140, 800 $121,800 MIRR Use the MIRR decision rule to evaluate this project. Note: Do not round intermediate calculations and round your final answer to 2 decimal places. 5 $81,000 %
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Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 9 percent, and that the maximum allowable payback and discounted payback statistics for the project are 2.0 and 3.0 years, respectively. Time: 0 1 2 3 4 5 6 Cash flow: −$7,100 $1,000 $2,200 $1,400 $1,400 $1,200 $1,000 Use the IRR decision rule to evaluate this project. (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.) Should it be accepted or rejected?multiple choice accepted rejected
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Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 10 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3.0 and 3.5 years, respectively. Time: 0 1 2 3 4 5 Cash flow: -S 245,000 $ 66,800 $ 85,000 $ 142,000 $ 123,000 $ 82, 200 Use the Pl decision rule to evaluate this project. Note: Do not round intermediate calculations and round your final answer to 2 decimal places. Should it be accepted or rejected? (Click to select)
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 13 percent, and that the maximum allowable payback and discounted payback statistics for your company are 2.5 and 3.0 years, respectively. Time: 0 1 2 3 4 5 Cash flow: −$ 225,000 $ 64,800 $ 83,000 $ 140,000 $ 121,000 $ 80,200 Use the IRR decision rule to evaluate this project. Note: Do not round intermediate calculations and round your final answer to 2 decimal places.
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 11 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3 and 3.5 years, respectively. Time: 0 1 2 3 4 5 Cash flow: −$ 235,000 $ 65,800 $ 84,000 $ 141,000 $ 122,000 $ 81,200 Use the NPV decision rule to evaluate this project.
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 11 percent, and that the maximum allowable payback and discounted payback statistics for your company are 2.5 and 3.0 years, respectively. Time: 0 1 2 3 4 5 Cash flow: −$356,000 $65,700 $83,900 $140,900 $121,900 $81,100 Use the NPV decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Should it be accepted or rejected?multiple choice accepted rejected
what is the maximum amount you would be willing to pay for an investment opportunity that you expect to bring you $1,100 in one year, 2,420 in 2 years and $3000 per year for the following 5 years given that you require a return of 10% on investment with similar level of risks? 1. 12,398 2. 17,000 3. 14,372 4. 18,520 5. 11,372

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