Answered: WACC: Year Cash flows O 0$309.27 O…

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Finance

WACC: Year Cash flows O 0$309.27 O 0$286.36 O 0$355.08 O 0$349.36 O 0$294.95 0 -$1,100 $400 2 $390 3 $380 $370 5 $360

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

Barry company is considering a project that has the following cash flow and WACC data. what is the projects NPV? Note that you should use the WACC as the discount rate

WACC:
Year
Cash flows
0$309.27
O 0$286.36
O 0$355.08
O 0$349.36
O 0$294.95
11.75%
0
-$1,100
1
$400
2
$390
3
$380
4
$370
5
$360

Definition Definition Calculation used to evaluate the investment and financing decisions that involve cash flows occurring over multiple periods. NPV is calculated as the difference between the present value of cash inflow and cash outflow. NPV is used for capital budgeting and investment planning as well as to compare similar investment alternatives.

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Similar questions

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QUANTITATIVE. Fill in the following statements based on the below project financial analysis. a. The Net Present Value is b. The Return on Investment is c. The project will break even (make back its costs) in Year d. This project Created by: Praju Manageski Note: Change the inputs, such as discount rate, number of years, costs, and benefits. Be sure to Discount rate Costs Discount factor Discounted costs Benefits Discount factor Discounted benefits profitable because the ROI and NPV are both Financial Analysis for Project GGU Assume the project is completed in Year 0 Discounted benefits -costs Cumulative benefits - costs ROI 5% 10,000 1.00 10,000 0 1.00 0 (10,000) (10,000) 16% 0 0.95 2,000 0.95 1,905 Year 0 0.91 5000 0.91 4,535 1,905 4,535 (8,095) (3,560) 0 0.86 . 6000 0.86 5,183 5,183 1,623 10,000 11,623 1,623 NPV

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