YearCash Flow0-$1,180,0001275,0002400,0003480,0004320,000This project exhibitscash flows.Henderson's desired rate of return is 7.00%. Given the cash flows expected from the company's new project, compute the project's anticipatedmodified internal rate of return (MIRR). (Hint: Round all dollar amounts to the nearest whole dollar, and your final MIRR value to two decimal places.)6.71%8.39%9.23%10.07%Activity FrameHenderson's managers are generally conservative, and select projects based solely on the project's modified internal rate of return (MIRR). Shouldthe company's managers accept this independent project?NoYes

Step 1: The calculation of the MIRR AB1YearCashflow20 $ -1,180,000.00 31 $ 2,75,000.00 42 $…

Answered: Year Cash Flow 0 -$1,180,000 1 275,000…

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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Project X requires an initial outlay of sh.500, 000 and has a profitability index of 1.4. The project is expected to generate equal annual cash flows over the next ten years. The required return for this project is 16%. What is project X’s internal rate of return? Select one: A. 19.88% B. 26.12% C. 24.78% D. 22.69%
Consider the following project: Period Net cash flow 0 -100 1 0 2 78.55 3 78.55 The internal rate of return is 20%. The NPV, assuming a 20% opportunity cost of capital, is exactly zero. Calculate the expected economic income and economic depreciation in each year. (Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) 1 Period 2 3 Change in value (economic depreciation) (20.00) 54.55 65.46 Expected economic income
Pet World is considering a project that has the following cash flow data. Year Cash flows 0 -$9,500 1 2 3 4 $2,000 $2,025 $2,050 $2,075 $2,100 If the required rate of the return on similar projects is 3%, the firm should IRR is 5 this project because its accept; 2.31% reject; 2.57% reject; 2.82% reject; 2.08% accept; 3.10%
Assume an investment has cash flows of -$25,200, $7,000, $8,000, $8,500, and $9,000 for Years 0 to 4, respectively. What is the NPV if the required return is 11.1 percent? decimal places, e.g., -32.16.) Should the project be accepted or rejected? (do not round intermediate calculations, enter negative number with a minus sign and round your answer to 2 (write either "accepted" or "rejected")
Referring to the table below, calculate the Net Present Value (NPV) and Profitability Index (PI). The required rate of return for these projects is USD10%. The projects’ expected cash flows are as follows: Year Machine 1 (USD) Machine 2 (USD) 0 (17,000) (17,000) 1 8,000 2,000 2 7,000 5,000 3 5,000 9,000 4 3,000 9,500
You are considering the investment of $111,000 (today) in a lemonade stand. Also, you expect the stand to generate the following future cash flows: • At the end of year 1: $0 • At the end of year 2: $0 • At the end of year 3: $0 • At the end of year 4: $178,000 What is the IRR (Internal Rate of Return) of this project? (Answer to the nearest 0.01%)
Subject: acounting
Solve Part B of the question
Bluekettle Inc. is considering a project that has the following cash. What is the project's NPV(net present value) if you use a required rate of 14% ? If the NPV is negative, put the minus sign in front of your answer, such as -200.56. Note that a project's projected NPV can be negative, in which case it will be rejected. Year 0 1 2 3 Cash flows - $6,500 $1,600 $3,700 $7,500
What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project’s net present value (NPV). You don’t know the project’s initial cost, but you do know the project’s regular, or conventional, payback period is 2.50 years. Year Cash Flow Year 1 $350,000 Year 2 $500,000 Year 3 $450,000 Year 4 $425,000 If the project’s weighted average cost of capital (WACC) is 8%, the project’s NPV (rounded to the nearest dollar) is: $312,620 $295,253 $277,885 $347,356 Which of the following statements indicate a disadvantage of using the regular payback period (not the discounted payback period) for capital budgeting decisions? Check all that apply. The payback period is calculated using net income instead of cash flows. The payback period does not take the project’s entire life into account.…
Use the Modified IRR (MIRR) method to determine the rate of return of a project that has the following cash flow diagram. The investment rate is 15% and the borrowing rate is 12%. g = 20% $3 $3 $3 $3 years 11 3. 4 6. 7 8 9 10 $2 S2 $2 $2
1. Calculate the net present value of a project which requires an initial investment of OMR 300,000 and it is expected to generate a cash inflow of OMR 60,000 each month for 12 months. Assume that the salvage value of the project is zero. The target rate of return is 12% per annum. Write any formula that you will use first. Is this even or uneven cash flow? What is your opinion about the project? Justify your answer. 2. You as a project manager were asked to develop an Inventory Control Management Information System. Apply the SWOT analysis mind mapping technique.

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