Using discount rate 20% the project should be rejected or accepted inInitial cost: $467,000Cash flow year one: $134,000Cash flow year two: $230,000Cash flow year three: $187,000Cash flow year four: $134,000PrintDone12f10f11Af8fg144

Although a project can be valued on different basis like IRR or payback period etc. The core measure…

Answered: Using discount rate 20% the project…

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Using discount rate 20% the project should be rejected or accepted

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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Question

Using discount rate 20% the project should be rejected or accepted

in
Initial cost: $467,000
Cash flow year one: $134,000
Cash flow year two: $230,000
Cash flow year three: $187,000
Cash flow year four: $134,000
Print
Done
12
f10
f11
A
f8
fg
144

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Choices for last three requirements 3. What is the approximate IRR of Project A? a. 28% b. 18% c. 24% d. 21% 4. What is the approximate IRR of Project B? a. 17% b. 14% c. 20% d. 22% 5. if the crossover rate is exactly 9.31% which of the following discount rate would have a conflict in the decision making (between NPV and IRR) assuming the projects are mutually exclusive? a. 7% b. 11%
28) ABC Corporation is concerned that the following project has some problem with IRR. Year 0 1 2 4 5 -150-120 CF_Project 700 -100-90 How many discount rates produce a zero NPV for this project? A) One, a discount rate of 0% B) One, a discount rate of 36% C) One, a discount rate of 69% D) Two, discount rates of 0% and 36% E) Two, discount rates of 0% and 69% F) Two, discount rates of 36% and 69% G) None H) None of the above 29) ABC Corporation is considering an investment of $400 million with expected after-tax cash inflows of $102 million per year for seven years. The required rate of return is 10%. However, there is a possibility that the project will not get the required level of investments and ABC Corporation will have no other choice but to proceed with available funding (90% of the required investments). In this case, the after-tax cash inflows of $91,8 million per year are expected for seven years. As a result, on the NPV profile of a project: A) the vertical intercept shifts…
Pat will receive 100,000 in 3 years. Over the next three years, the interest rates will vary as follows:In year 1, the nominal rate of discount is 6% compounded monthly.In year 2, the nominal rate of interest is 7% compounded quarterly.In year 3, the constant annual force of interest is 6%.How much should he invest today to receive that amount in 3 years?
Solve both please
Which of the following statements are true? I At higher discount rate, a project is more likely to be rejected. II A project is acceptable if the IRR = 8% while the cost of capital = 5%. III IRR does not account for time value of money. Group of answer choices 1. All of the above. 2. I and II 3. I and III 4. II and III
Alternative A B C which to choose.
Your Question : Please introduction and correct and incorrect option explain!
8
Novell, Inc., has the following mutually exclusive projects. Year Project A Project B 0 $27,000 $30,000 1 15,500 2 12,000 3 3,600 16,500 10,500 12,000 a-1. Calculate the payback period for each project. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Project A Project B 1.958 years 2.250 years a-2. If the company's payback period is two years, which, if either, of these projects should be chosen? Project A Project B
Subject: acounting
Consider the following four alternatives. Three are do-something and one is Do -Nothing. Alternative A B D Cost $O $50 $30 $40 Net annual benefit Useful life (years) Which is the preferred alternative? If 10% interest rate is selected. Use PW analysis. $O $14 $5 $7 5 10 10
Calculate the result of NPV for project A with discount rate = 10%, the best solution is: Year 0 123 + 4 Select one: a. 95.5 b. 127.3 O b. O C. c. -181.8 O d. d. -136.4 A -800 100 200 300 200 B -200 50 70 80 240

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