Consider the following two projects:ProjectYear 0Year 1Cash Flow Cash FlowAB- 100-734030OA. 2.7 yearsOB. 2 yearsOC. 2.3 yearsD. 2.5 yearsYear 2Cash Flow5030The payback period for project A is closest toYear 3Cash Flow4030***Year 4Cash FlowN/A30DiscountRate0.10.1

Payback period of any project is time required to recover initial investment of projects done.

Answered: Year 0 Cash Flow - 100 -73 Year 1 Cash…

Year 0 Cash Flow - 100 -73 Year 1 Cash Flow Year 2 Cash Flow 40 30 ack period for project A is closest to 50 30 Year 3 Cash Flow 40 30 Year 4 Cash Flow N/A 30 Disco Rat 0.1 0.1

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 content area top Part 1 (IRR calculation) Determine the IRR on the following projects: a. An initial outlay of $13,000 resulting in a single free cash flow of $17,165 after 9 years b. An initial outlay of $13,000 resulting in a single free cash flow of $46,394 after 15 years c. An initial outlay of $13,000 resulting in a single free cash flow of $105,001after 25 years d. An initial outlay of $13,000 resulting in a single free cash flow of $13,653 after 4 years
Internal rate of return and modified internal rate of return. Quark Industries has three potential projects, all with an initial cost of $2,100,000. Given the discount rate and the future cash flow of each project in the following table, E, what are the IRRS and MIRRS of the three projects for Quark Industries?
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Problem 8-8 Payback (LO4) The following are the cash flows of two projects: Year Project A $ (380) Project B $ (380) 0 210 280 210 280 210 280 210 1234 4 What is the payback period of each project? Note: Round your answers to 1 decimal place. Project A B Payback Period years years
Year O 1 2 4 3 O $1.838.67 O $1.854.03 O $2,167.89 Given this information, and assuming that the relevant cost of capital for both projects is 9%. determine the net present value (NPV) for the project with the highest internal rate of return (IRR). O $2.105.21 Project A Cash Flow $10,000 00 $1,905.54 $ 3.000.00 $4,000.00 $5,000.00 $3,000.00 Project B Cash Flow $11,000 00 $5,000.00 $ 4,000.00 $4,000.00 $3,000.00
which has a better IRR Project 1 Year Cashflows Discount Rate 10% 0 $ (750,000.00) 1 $ 250,000.00 2 $ 300,000.00 3 $ 350,000.00 4 $ 200,000.00 5 $ 100,000.00 Project 2 Year Cashflows Discount Rate 10% 0 $ (1,000,000.00) 1 $ 200,000.00 2 $ 300,000.00 3 $ 400,000.00 4 $ 500,000.00 5 $ 700,000.00
Tech Techies Company has a project available with the following cash flows :Year Cash Flow0 -$16,8001 $6,9002 $8,2003 $3,5004 $3,100What is the payback period?a) 1 yearb) 2 yearsc) 3 years
QUESTION 6 Seaborn Co. has identified an investment project with the following cash flows. Year Cash Flow $950 1,050 1,320 1,200 1 2 3 4 If the discount rate is 10 percent, what is the present value of these cash flows? 3542.76 3578.84 3418.66 4470.00 3847.03 Click Save and Submit to save and submit. Click Save All Answers to save all answers. SEP 28 30 tv ♫ A
Yellow Day has a project with the following cash flows: Year 0 1 2 Cash Flows -$ 26, 200 10,150 17,100 9,240 -3,200 What is the MIRR for this project using the reinvestment approach? The interest rate is 7 percent. 4 Multiple Choice 10.24% 14.50% 8.54% 11.39% 13.29%
You are given the following cash flow information for Project A TV Inflows Year 0 PV Outflows -$150,000.00 1 Project A -$150,000.00 $80,000.00 -$25,000.00 $50,000.00 2 $80,000.00 -$30,000.00 $75,000.00 Totals 3 4 5 6 O 19.33% $75,000.00 Now assume that the project's cost of capital is 16.0 percent, but that its true reinvestment rate is 24.0 percent. Given this information, determine the project's modified internal rate of return (MIRR). Ⓒ 18.56% 5 pts
D Open recovered wor x✓ fx 0 A B C D E F OMEGA PROJECT CASH FLOW INFORMATION Year Inflow Outflow = Newflow 0 1 2 3 G -$225,000 -$190,000 $150,000 $190,000 $215,000 $175,000 $197,000 $70,000 $582,000 $225,000 0 $190,000 $150,000 0 $220,000 $30,000 4 $215,000 0 5 $205,000 $30,000 6 $197,000 0 7 $100,000 $30,000 Total $1,087,000 $505,000 Required ROI 18% Project Omega NPV (Year 0) Project Omega Total NPV Which of the two projects would you fund and why? ▶ 3T Company Data + Ready have on project selection? (Reference Section 2.4, pg 38-39) 19 MAY 910 30 H NPV I K L M N O ALPHA PROJECT CASH FLOW INFORMATION Year Inflow Outflow = 0 1 $50,000 2 $150,000 3 $250,000 4 $250,000 5 $200,000 6 $180,000 7 $120,000 Total $ 1,200,000 Required ROI Project Alpha NPV (Year 1). Project Alpha NPV 1 tv $300,000 $100,000 0 $50,000 0 $50,000 0 $30,000 $530,000 18% d P Newflow -$300,005 -$50,000 $150,000 $200,000 $250,000 $150,000 $180,000 $90,000 $670,000 A Q NPV

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