#7 Suppose that Caterpillar (CAT) has a project with the following cash flows: YEAR Cash flow 0 -$40.00 1 2 $13.00 $11.00 3 $11.00 4 $12.00 The company has debt valued at 45.00 billion on its balance sheet, while the market value of its common stock is roughly 31.00 billion. The yield to maturity on the debt is 5.50%, and the cost of equity for the firm is 12.00%. Finally, the marginal tax rate facing the company is 34.00%. What is the NPV for this project?

Use the information below to answer Question#40: GIVEN: The XYZ Company is considering the following project with its corresponding financial data. The Company requires a 9% return from its investments. $ 500,000 $ 200,000 $ 225,000 $ 245,000 Initial investment: Expected Cash in-flow Year 1: Expected Cash in-flow Year 2: Expected Cash in-flow Year 3: Present Value Factor of 1 at 9%: n=1: 0.91743 n=2: 0.84168 n=3: 0.77218 40) Choose from one of the following that accurately depicts this decision: A) This investment should not be considered because NPV is a negative $62,048 B) This învestment should be considered because NPV equals positive $62,048 C) This investment should be considered because the IRR for this investment is obviously less than its Required Rate of Return D) B and Care both correct

The annual cash flows of a project are shown in the table below: Year t = 0 t = 1 t = 2 Cash Flow -$951 M $2,710 M -$1,887 M   The discount rate for the project is 29.0% per annum and spreadsheet analysis has found an internal rate of return of 21.0% per annum. Given this information, should the firm invest in the project?

A project has the following expected net cash flows associated with it: Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 -R 800 000 R150 000 R200 000 R400 000 R100 000 R100 000   The cash flows are expressed in real terms. Adjust the cash flows to nominal terms assuming constant inflation of 5% and calculate the NPV of the project. The company in question has a WACC of 10%.

A company is considering an investment with the following expected cash flows, in constant dollars. The general inflation rate (7) during this project period is expected to be 5%. The company's market interest rate is 15%. What is the equivalent present worth of these cash flows at period 07 O $ 3,567 O $7,618 $ 4,248 O $6,927 $ 8,317 Year 0 1 2 3 Cash flow ($) -30,000 15,000 15,000 15,000

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 11 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3.0 and 3.5 years, respectively. Time: 0 1 2 3 4 Cash flow: -$352,000 $66,500 $84,700 $141,700 $122,700 5 $81,900 Use the NPV decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.) NPV Should it be accepted or rejected? O accepted O rejected Microsoft Word

For the given cash flows, suppose the firm uses the NPV decision rule. Year 0 1 Cash Flow -$ 41,000 20,000 2 3 23,000 14,000 a. At a required return of 11 percent, what is the NPV of the project? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. At a required return of 24 percent, what is the NPV of the project? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. a. NPV b. NPV

The firm forecasts a free cash flow of ₱ 41 million in Year 3, i.e., at t = 3, and it expects FCF to grow at a constant rate of 5% thereafter. If the weighted average cost of capital is 11% and the cost of equity is 15%, what is the horizon value, in millions at t = 3? a. ₱ 840 b. ₱ 717c. ₱ 883 d. ₱ 834

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 11 percent, and that the maximum allowable payback and discounted payback statistics for your company are 2.5 and 3.0 years, respectively. 10 nts Time: 1 2 3 4 5 Cash flow: $65,500 $83,700 $140,700 $121,700 $80,900 $360,000 Print Use the Pl decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.) eferences PI Should it be accepted or rejected? О ассеpted O rejected

For the given cash flows, suppose the firm uses the NPV decision rule. Year 0 O 23 -$ Cash Flow 150,000 66,000 73,000 57,000 a. At a required return of 10 percent, what is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. At a required return of 20 percent, what is the NPV of the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. NPV b. NPV