XYZ is considering a project that would last for 3 years and have a cost of capital of 18.20 percent. The relevant level of net working capital for the project is expected to be $2,020.30 immediately (at year 0); $4,790.00 in 1 year; $14,000.00 in 2 years; and $0.00 in 3 years. Relevant expected revenue, costs, depreciation, and cash flows from capital spending in years 0, 1, 2, and 3 are presented in the following table. The tax rate is 54.90 percent. What is the net present value of this project?. Year 0 Year 1 Year 2 Year 3 $12,500.00 $10,400.00 $12,100.00 Revenue $ 0.00 Costs $ 0.00 $3,990.00 $3,980.00 $3,500.00 Depreciation $ 0.00 $2,200.00 $2,250.00 $2,100.00 Cash flows from capital spending $-5,910.00 $1,350.00 $ 20.00 $3,770.00 O $7794.24 (plus or minus $10) $580.25 (plus or minus $10) O $5323.60 (plus or minus $10) O $10279.59 (plus or minus $10) None of the above is within $10 of the correct answer

XYZ is considering a project that would last for 3 years and have a cost of capital of 18.20 percent. The relevant level of net working capital for the project is expected to be $2,020.30 immediately (at year 0); $4,790.00 in 1 year; $14,000.00 in 2 years; and $0.00 in 3 years. Relevant expected revenue, costs, depreciation, and cash flows from capital spending in years 0, 1, 2, and 3 are presented in the following table. The tax rate is 54.90 percent. What is the net present value of this project?. Year 0 Year 1 Year 2 Year 3 $12,500.00 $10,400.00 $12,100.00 Revenue $ 0.00 Costs $ 0.00 $3,990.00 $3,980.00 $3,500.00 Depreciation $ 0.00 $2,200.00 $2,250.00 $2,100.00 Cash flows from capital spending $-5,910.00 $1,350.00 $ 20.00 $3,770.00 O $7794.24 (plus or minus $10) $580.25 (plus or minus $10) O $5323.60 (plus or minus $10) O $10279.59 (plus or minus $10) None of the above is within $10 of the correct answer

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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CII, Incorporated, invests $700,000 in a project expected to earn a 9% annual rate of return. The earnings will be reinvested in the project each year until the entire investment is liquidated 11 years later. What will the cash proceeds be when the project is liquidated? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your "FV of a single amount" to 4 decimal places and final answer to the nearest whole dollar.) Present Value X f (FV of a Single Amount) Future Value
A project has an initial outlay of $2,182. It has a single payoff at the end of year 9 of $6,947. What is the net present value (NPV) of the project if the company’s cost of capital is 10.20 percent?
Vermont Technology is considering a project that would last for 3 years and have a cost of capital of 21.72 percent. The relevant level of net working capital for the project is expected to be $1,990.00 immediately (at year 0); $4,830.00 in 1 year; $15,200.00 in 2 years; and $0.00 in 3 years. Relevant expected revenue, costs, depreciation, and cash flows from capital spending in years 0, 1, 2, and 3 are presented in the following table. The tax rate is 50.00 percent. What is the net present value of this project? Year 0 Revenue $0.00 Costs $0.00 Depreciation $0.00 Cash flows from capital spending $-$7,130.00 Year 1 Year 3 $12,700.00 $12,700.00 $12,700.00 $4,020.00 $4,020.00 $4,020.00 $1,950.00 $1,950.00 $1,950.00 $0.00 Year 2 $0.00 $4,180.00 $3,195.22 (plus or minus $10) -$5,233.42 (plus or minus $10) -$8,995.62 (plus or minus $10) $5,002.99 (plus or minus $10) O None of the above is within $10 of the correct answer
Calculate the capitalized cost of a project that has an initial cost of P3M. The annual operating cost will be P100,000 at the end of every year for the first five years and P160,000 thereafter. Assume i=15%.
XYZ is evaluating a project that would last for 3 years. The project's cost of capital is 15.60 percent, its NPV is $43,200.00 and the expected cash flows are presented in the table. What is X? Years from today 0 1 2 3 Expected Cash Flow (in $) -55,800 71,000 -15,900 X O An amount less than $43,200.00 or an amount greater than $82,666.00 O An amount equal to or greater than $70,205.00 but less than $82,666.00 O An amount equal to or greater than $60,505.00 but less than $70,205.00 O An amount equal to or greater than $53,257.00 but less than $60,505.00 O An amount equal to or greater than $43,200,00 but less than $53,257.00 M
A project requires an increase in inventories, accounts payable, and accounts receivable of $125,000, $70,000, and $65,000, respectively. If opportunity cost of capital is 1% and the project has a life of 19 years, and the working capital investments will be recovered at the end of the life of the project, what is the effect on the NPV of the project? Enter your answer rounded to two decimal places. Enter your response below. Number
A project has an initial cost of $61,450, expected net cash inflows of $11,000 per year for 10 years, and a cost of capital of 8%. What is the project's MIRR? Round your answer to two decimal places.
Find internal rate of return of a project with an initial cost of $43,000, expected net cash inflows of $9,550 per year for 8 years, and a cost of capital of 9.35%. Round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer is .05718 or 5.718% round as 5.72. A. 15.64% B. 14.90% C. 13.70% D. 14.75% E. 11.17%
NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is considering. The initial investment is $41,150, and the project is expected to yield after-tax cash inflows of $9,000 per year for 7 years. The firm has a cost of capital of 8%. a. Determine the net present value (NPV) for the project. b. Determine the internal rate of return (IRR) for the project. c. Would you recommend that the firm accept or reject the project? a. The NPV of the project is $. (Round to the nearest cent.) Text dia Librai I Calculat Resource Enter vour answer in the answer box and then click Check Answer. Check Answer ic Study es Clear parts remaining nunication Tools > O Type here to search insert ( to |立
What is the NPV of a project that costs $38,000 today and is expected to generate annual cash inflows of $9,000 for the next 7 years, followed by a final inflow of $15,000 in year 8. Cost of capital is 7.4%. Round to the nearest cent.
Project Z has an initial investment of $67,945.00. The project is expected to have cash inflows of $23,849.00 at the end of each year for the next 13.0 years. The corporation has a WACC of 9.96%. Calculate the NPV for project Z.
A project has an initial cost of $45,000, expected net cash inflows of $9,000 per year for 10 years, and a cost of capital of 10%. What is the project's MIRR?

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