4. Calculating Discounted Payback [L03] An investment project has annual cash inflows of $2,800, $3,700, $5,100, and $4,300, for the next four years, respectively. The discount rate is 11 percent. What is the discounted payback period for these cash flows if the initial cost is $5,200? What if the initial cost is $6,400? What if it is $10,400?

4. Calculating Discounted Payback [L03] An investment project has annual cash inflows of $2,800, $3,700, $5,100, and $4,300, for the next four years, respectively. The discount rate is 11 percent. What is the discounted payback period for these cash flows if the initial cost is $5,200? What if the initial cost is $6,400? What if it is $10,400?

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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5. A new tablet computer from the R&D department will earn $20,000 in revenue in one year, which will then grow by 20% each subsequent year. Suppose an interest rate of 5% per year and a horizon of 20 years. What is the cutoff value for the initial investment that would make this project worthwhile? (i) Compute the answer using the formula (ii) Compute the answer using a spreadsheet (iii) If we change the interest rate, the cutoff value will change. Draw a plot of the cutoff value versus interest rate.
year payback period criteria and a required return of 12 percent. |Year Cash flow |(OMR) -26,000 18,000 10,000 7,000 -15,000 9,000 2 3 4 11. What is the net present value for the project? 12. What is the payback period for the project? 13. What is the discounted payback period for the project? 14. What is the profitability index for the project? 15. Given your analysis, should the fim accept or reject the projeet?
What is the net present value of a project with the following cash flows if the discount rate is 15 percent? Year 0: Cash Flow 5-48,000, Year 1: Cash flow = $15,600, Year 2: Cash flow = $28,900, Year 3: Cash flow = 515, 200 Seleccione una: A. -$1,618.48 B. $1,035.24 C. S9.593.19 D $2,687.98 E. $1,044.16
A new project will have an intial cost of $14,000. Cash flows from the project are expected to be $-4,000, $6,000, $8,000, and $12,000 over the next 4 years, respectively. Assuming a discount rate of 12%, what is the project's IRR? Question 5 options: 12.61% 13.14% 13.66% 13.93% 13.40%
The cost estimate for a pipe replacement project is estimated at $6 million in today's dollars. The project will start construction in 5 years. Assume that the inflation rate is 8.5 percent per year. How much should be allocated for the project to account for inflation? 1. $11M 2. $9M 3. $7M 4. $12M
Suppose you considering investing $33 to earn $5.9 every year for 9 years. If the annual interest rate is 4.8%, what is the payback of this project? Suppose you considering investing $22 to earn $4.0 every year for 7 years. If the annual interest rate is 3.4%, what is the payback of this project?
You are considering a project with an initial cost of $8245 and a required return of 11.6%. What is the discounted payback if the expected cash flows are $3148, $3429, $2731, $3048, and $3930 respectively over the next 5 years? a. 3.66 years b. 3.66 years c. 3.36 years ✔ d. 2.96 years e. 2.98 years
Consider a project with the following cash flows in dollars ($): Year Cash Flow0 -15,0001 50002 50003 50004 5000 Assume the appropriate discount rate for this project is 12%. What is the payback period for this project? (Round your answer to the tenths.)
A new project will have an intial cost of $12,000. Cash flows from the project are expected to be $6,000, $5,000, and $4,000 over the next 3 years, respectively. Assuming a discount rate of 12%, what is the project's IRR? Question 3 options: 13.51% 12.99% 14.03% 13.25% 13.77%
An investment project costs $16,800 and has annual cash flows of $4, 100 for six years. a. What is the discounted payback period if the discount rate is zero percent? b. What is the discounted payback period if the discount rate is 6 percent? c. What is the discounted payback period if the discount rate is 21 percent?
am. 191.

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