The Oklahoma Pipeline Company projects the following pattern of inflows from an investment. The inflows are spread over time toreflect delayed benefits. Each year is independent of the others.Year 1Year 5Cash Inflow Probability Cash Inflow Probability$ 1200.400.351300.201400.40Year 1Year 5Year 10$110130150Standard Deviation0.300.35Year 10Cash Inflow$ 100130160The expected value for all three years is $130.Compute the standard deviation for each of the three years. (Do not round intermediate calculations. Round your answer to 2decimal places.)Probability0.300.400.30

Formula = Standard deviation =Sqrt(sum(probability*(value-expected value)^2))

The Oklahoma Pipeline Company projects the following pattern of inflows from an investment. The inflows are spread over time to reflect delayed benefits. Each year is independent of the others. Year 1 Year 5. Cash Inflow Probability Cash Inflow Probability 0.40 0.35 0.20 0.40 $120 130 140 Year 1 Year 5 Year 10 $110 130 150 Standard Deviation 0.30 0.35 Year 10 O Cash Inflow $100 130 160 The expected value for all three years is $130. Compute the standard deviation for each of the three years. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Probability 0.30 0.40 0.30

The Oklahoma Pipeline Company projects the following pattern of inflows from an investment. The inflows are spread over time to reflect delayed benefits. Each year is independent of the others. Year 1 Year 5. Cash Inflow Probability Cash Inflow Probability 0.40 0.35 0.20 0.40 $120 130 140 Year 1 Year 5 Year 10 $110 130 150 Standard Deviation 0.30 0.35 Year 10 O Cash Inflow $100 130 160 The expected value for all three years is $130. Compute the standard deviation for each of the three years. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Probability 0.30 0.40 0.30

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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A project has the following cashflows. The project's cumulative cashflow turns positive between year 4 and 5, to be precise it is 4.22. Your further analysis indicates that you are too conservative about the cash flows for Year 1 and 2. You expect both cash flows to be at least $1000 higher, if not more :) How will this affect your calculation of the precise time when the cumulative cashflow turns positive? t 0 ON 35 67 2 4 $ Cash flow (250,000) 41,000 48,000 63,000 79,000 88,000 64,000 41,000 Changes. The project's cumulative cashflow turns positive a bit earlier. Changes. The project's cumulative cashflow now turns positive a lot later. Changes. The project's cumulative cashflow now turns positive a bit later. No change. The project's cumulative cashflow still turns positive between year 4 and 5, to be precise it is 4.22.
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Consider the following projects: Year 0 Year 1 Year 2 Year 3 Year 4 Discount Rate Cash Flow A -100 30 20 40 B -73 25 20 20 C -27 10 9 9 13= 60 14.50% 45 15.00% 11 14.00% a. Find the NPV of the projects, will you accept/reject them? b. What is the IRR of the projects, will you accept/reject? c. If the firm had $250 to invest today, what project(s) should it pursue? d. If the firm only had $100 to invest today, what project(s) should it pursue?
You are considering a project that has the following cash flow data. What is the project's payback? Year 0 1 2 3 Cash Flow -900 350 450 550 Group of answer choices 2.40 1.53 1.96 2.18 2.62
Masulis Inc. is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? WACC: Year 0 Cash flows -$1,225 a. 3.37 years b. 3.63 years c. 1.12 years d. 2.63 years e. 2.37 years 8.75% 1 $575 2 $535 3 $495 4 $455
A project has the following cash flows: Cash Year Flow 16,300 1 7,000 8,300 6,800 2 3 a. What is the NPV at a discount rate of zero percent? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the NPV at a discount rate of 12 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the NPV at a discount rate of 19 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.) d. What is the NPV at a discount rate of 28 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.) а. NPV b. NPV C. NPV NPV
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The cash flow diagram below shows the net cash generated (A) every year with initial (1) investment requirement for a certain project whose lifetime is n=8 years with negligible (i.e. zero) salvage value at end of life. It is known that a simple payback period is three (3) years. What is the implied minimum acceptable rate of return (MARR) given this information? A >H I yrs.
Annual cash inflows that will arise from two competing investment projects are given below: Year Investment A Investment B 1 $7,000 $ 10,000 2 8,000 3 9,000 4 10,000 $ 34,000 9,000 8,000 7,000 $ 34,000 The discount rate is 7%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: Compute the present value of the cash inflows for each investment.
Is it okay to solve the payback period using the initial investment divided by the after-tax cashflow?
Consider the following two projects with cash flows in $: Project Year 0 Year 1 Year Year 3 Year 4 Discount Rate A - 100 40 50 60 n/a 0.15 B -73 30 30 30 30 0.15 For Project A, after two years, the project has been paid off for $90 out of $100. To find out the fraction of the third year, we take the $10 yet to be paid and divide it by $60, which is $10/$60 = 0.167. Therefore, the payback period for Project A is 2.167 years. Following the same logic, calculate the payback period for Project B.
Are there multiple IRRs for the following cash-flow sequence? How many are possible according to Descartes' rule of signs? If ε = 9% per year, what is the ERR for the cash flows of this project? Let MARR = 9% per year. ΕΟΥ 0 1 2 Cash Flow ($) 120 90 50 3 20 4 - 1,810 5 580 6 510 There is (are) multiple IRR(s) for the given cash-flow sequence. A maximum of two IRR value(s) is (are) suggested by the Descartes' rule of signs. The ERR for the cash flows of this project is%. (Round to two decimal places.) 7 410 8 330 9 180 10 110

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