The company buys an asset that costs $11,200 and returns net cash flow of $160 per month for 3 years, followed by $270 per month for 3 additional years. The company financing rate is 10.9% compounded monthly. Find the asset's annualized internal rate of return and net present value. O The IRR and NPV equal 16.69% and $1,860.86 O The IRR and NPV equal 15.69% and $1,960.86 O The IRR and NPV equal 17.69% and $2,060.86

The company buys an asset that costs $11,200 and returns net cash flow of $160 per month for 3 years, followed by $270 per month for 3 additional years. The company financing rate is 10.9% compounded monthly. Find the asset's annualized internal rate of return and net present value. O The IRR and NPV equal 16.69% and $1,860.86 O The IRR and NPV equal 15.69% and $1,960.86 O The IRR and NPV equal 17.69% and $2,060.86

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

See similar textbooks

Similar questions

Red Zone Corporation recently purchased a new machine for $339,0 13.20. The new equipment has a useful life of 10 years. Net cash flows will be $60,000 per year, end of year payments. What is the internal rate of return? Question 1Select one: a. 12 percent b. 16 percent c. 14 percent d. 10 percent e. 18 percent
What is the NPV of a project that costs $100,000 provides $23,000 in cash flows annually for 6 years, requires a $5,000 increase in net working capital, and depreciates the asset straight-line over 6 years? The discount rate is 14% a) - $15,560.04 b) $14,782.09 c) -$13,282.71 d) $3,411.14
A project is estimated to cost $361,465 and provide annual net cash flows of $83,000 for six years. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Determine the internal rate of return for this project, using the Present Value of an Annuity of $1 at Compound Interest table shown
An investment has the following annual cash flow 1st year-Php50,000 2nd year- Php 65.000 3rd year - Php 45,000 4th year Php 40.000 Sth year - Php 40,000 The current cost of the investment is Php700,000. The investment can be sold at the end of Sth year for Pho700,00. The entity can borrow funds for 10%. Requirement: Compute the following * Present Value of the Investment b. Net present value of the investment Show your solunons
Suppose an industrial building can be purchased for $2,500,000 and is expected to yield cash flows of $180,000 in each of the next five years. (Note: assume payments are made at end of year.) If the building can be sold at the end of the fifth year for $2,800,000, calculate the IRR for this investment over the five-year holding period. A) 0.09%. B) 4.57%. C) 9.20%. Page 4 of 6 D) 10.37%
A general purpose truck is purchased for business. Its cost Basis is 70,000. It will last 10 years and be sold for 10,000. i = 6% for the loan with monthly payments. What is the depreciation allowance for the third year using MACRS? O 19466 O 894 21774 O 26971 O 13440
An investment of $9000 at 2% is compounded semiannually for three years. Find the future value and compound interest. Use the $1.00 future value table or the future value and compound interest formula.
Assume an investment of $100,000 is made today and is expected to earn a quoted interest rate of 9.20%. Compute the future value of the initial investment after 5 years (Column B), 25 years (Column C), and 45 years (Column D) at each compounding frequency in Column A (annual, semiannual, monthly, daily, and continuous). (A) (B) (C) (D) Frequency (m) FV (5 Years) FV (25 Years) FV (45 Years) 1 2 12 365 ∞
$255,000 is borrowed to purchase a block of land. It is to be repaid with monthly repayments at 4.2% interest over 25 years: (HINT: Use AMORT on your calculator) (a) Calculate the monthly repayments. (b) How much interest is paid over the life of the loan? (c) How much is still owed at the end of 10 years?
A certain end of year cash flows are expected to be P 7,000.00 at the end of the 3rd year, P 9,000.00 at the end of the 4th year, P 11,000.00 at the end of the 5thyear, and P 13,000.00 at the end of the 6th year. Using 15% interest per year, determine the equivalent a. present worth at the beginning of the first year and b. uniform annual worth at the end of each year of the 6 years. Calculate it manually, not in excel. Show complete solution and formula used. Please don't type it. Write it in a paper so that it can understand well. Thank you!ANS. P 20,837.60, AND P 5,506.06
Determine the present worth of the following cash flows based on an interest rate of 7.46% per year, compounded annually. Round off to two decimal places. End of Year 0 = Php 5944 End of Year 1 = Php 5552 End of Year 2 = Php 5460 End of Year 3 = Php 5731 End of Year 4 = Php 5119 End of Year 5 = Php 5665
A lot purchased for $4,500 is held for five years and sold for $13,500. The average annual property tax is $45 and may be accounted for at an interest rate of 12%. The income tax rate on the long term capital gain is 15% of the gain. What is the rate of return on the investment if the allowance for inflation is treated at an average annual rate of 7%?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS