JFINEX Corporation is considering a new project that will cost 150,000. The project is expected to generate equal annual cash flows over the next seven years. The required return for this project is 8%. What is the project's internal rate of return if the profitability index is 1.1?" Lower than 8% Higher than 8% 8% None of the above

JFINEX Corporation is considering a new project that will cost 150,000. The project is expected to generate equal annual cash flows over the next seven years. The required return for this project is 8%. What is the project's internal rate of return if the profitability index is 1.1?" Lower than 8% Higher than 8% 8% None of the above

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 3CMA

See similar textbooks

Similar questions

Salalah Tourism Service has taken up a new project with an initial investment of 100000 OMR.The expected future cashflow from the project over the next three years will be 47000 OMR, 49000 OMR and 45000 OMR.What is the profitability index if the discount rate is 14 percent? Select one: O a. 1.44 O b. 1.18 O c. None of these O d. 1.09 O e. 1.12
Salalah Wind Energy has taken up a new project with an initial investment of 50000 OMR.The expected future cashflow from the project over the next three years will be 22500 OMR, 23500 OMR and 24500 OMR.What is the profitability index if the discount rate is 7 percent? Select one: O a. 1.48 O b. 1.23 O c. 1.44 O d. 1.63 O e. None of these
JFINEX Corporation is considering a new project that will cost 165,000. It is expected to generate cash flows over the next three years in the amounts of +150,000 in year one, -20,000 in year two, and +80,000 in year three. The required rate of return is 7%. What is the payback period of this project?" 1.75 years 2.44 years 3.0 years 2.65 years None of the above
A project is projected to have the following net income: Year 1 = $80,000; Year 2 = $40,000; Year 3 = –$30,000. The same project has an initial investment of $300,000 and will lose value at a rate of $100,000 per year. The numerator in the average accounting return method will be?
A long term efficiency project will cost $837 today but will not yield any return for for 3 years (Cashflows at time (1) and (2) = 0). At time (3), the project will yield a positive cashflow of $1,079. What is the efficiency project's internal rate of return?
A proposed project is expected to generate returns of $50,000 per year for each of the next four years. If the project will cost $145,685 and taxes are ignored, what is the internal rate of the return (IRR) for the proposed project?. O 12% O 16% O 14% O Less than 10% Hi in
A project that will provde annual cash flows of $3,000 for nine years costs $10,000 today. a. At a required return of 10 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 28 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. c. At what discount rate would you be indifferent between accepting the project and rejecting it? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. NPV b. NPV c. Discount rate %
JFINEX Corporation is considering a new project that will cost 50,000. If the IRR is 8%, what is the profitability index assuming the project generated an NPV of 80,000?" 130,000 30,000 1.62.6 None of the above
Growth Enterprises believes its latest project, which will cost $82,000 to install, will generate a perpetual growing stream of cash flows. Cash flow at the end of the first year will be $7,000, and cash flows in future years are expected to grow indefinitely at an annual rate of 5%. a. If the discount rate for this project is 10%, what is the project NPV? Note: Do not round intermediate calculations. NPV b. What is the project IRR? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. IRR %
(a) Consider a project that costs $100 million today and generates a cash flow of $106 million in one year. What is the IRR of this project? Give your answer to 2 decimal places (b) Suppose the market interest rate is 7%. Use the IRR calculated in Q2(a) above to determine whether this project is profitable. Explain why or why not Do not use excel
A new project requires an initial investment of $12,000 today and is expected to generate cash flows of $2,350 per year for the next 10 years. The firm has a cost of capital or required rate of return of 8 percent. Should this project be accepted, and why? Use the IRR criterion. Notice all CFs from t-1 to t-10 are equal. IRR-7.50% 8.00% Reject IRR-8.45% IRR-14.55% 8.00% Accept IRR-10.25% 8.00% Accept 0% Accept
Growth Enterprises believes its latest project, which will cost $82,000 to install, will generate a perpetual growing stream of cash flows. Cash flow at the end of the first year will be $7,000, and cash flows in future years are expected to grow indefinitely at an annual rate of 5%. a. If the discount rate for this project is 10%, what is the project NPV? (Do not round intermediate calculations.) NPV b. What is the project IRR? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) IRR < Prev 2 of 8 Next search 長