Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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(6.1)
Please provide step by step explnation (no working out on excel)
q3- A project will require an initial outlay of $4000 and will result in a
a.
$151
b.
$-299
c.
$-321
d.
$-306
Clear my choice
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- A firm evaluates all of its projects by applying the IRR rule. Year Cash Flow 0 -$ 152,000 1 64,000 2 75,000 3 59,000 a. What is the project's IRR? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. If the required return is 13 percent, should the firm accept the project? % a. Internal rate of return b. Project acceptancearrow_forwardKiley Electronics is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's IRR can be less than the cost of capital (and even negative), in which case it will be rejected. r: 10.00% Year 0 1 2 3 Cash flows −$1,000 $550 $560 $570arrow_forwardMoving to another question will save this response. Question 5 XYZ is evaluating a project that would last for 3 years. The project's cost of capital is 17.20 percent, its NPV is $43,100.00 and the expected cash flows are presented in the table. What is 27 Years from today 0 1 2 3 Expected Cash Flow (in $) -53,600 71,700 -13,000 X O An amount equal to or greater than $69,384.00 but less than $75,459.00 O An amount equal to or greater than $43,100.00 but less than $52,436.00 O An amount equal to or greater than $52,436.00 but less than $63,115.00 O An amount equal to or greater than $63,115.00 but less than $69,384.00 O An amount less than $43,100.00 or an amount greater than $75,459.00arrow_forward
- Computer Consultants Inc. is considering a project that has the following cash flow and cost of capital (r) data. What is the project's MIRR? Note that a project's MIRR can be less than the cost of capital (and even negative), in which case it will be rejected. Year Cash flows r=13.00% 20.64% 18.35% 21.50% 19.32% 22.78% 0 -$1,000 1 $750 2 $600 3 $120arrow_forwardCompute the NPV for Project K if the appropriate cost of capital is 5 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) Project K Time: 0 1 2 3 4 5 Cash flow: −$10,500 $5,250 $6,250 $6,250 $5,250 −$10,500 NPV ?arrow_forwardCheck Compute the IRR statistic for Project F. The appropriate cost of capital is 13 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project F Time: 1 2 3 4 Cash flow: -$12,000 $4,350 $5,180 $2,520 $3,150 IRR % Should the project be accepted or rejected? O accepted O rejected MacBook Airarrow_forward
- Compute the NPV statistic for Project U if the appropriate cost of capital is 10 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project U Time: |1 3 4 Cash |-$1,000 $350 $1,480 -$520 $300 |-$100 flow:arrow_forward7.3 q5-arrow_forwardUse python to answer the following question: Question 5 A capital investment in an equipment with an upfront cost of $23,540 will provide you with the following annual cash flow stream (paid end of year): 1. $2,000 2. $1,456 3. $3,230 4. $6,850 5. $2,384 6. $1,234 7. $5,987 8. $4,190 The project will incur the following cost for maintenance and repair (paid end of year): Year 3: ($2,984) Year 4: ($1,837) Year 6-8: ($2,000) Calculate the NPV of the investment and comment on whether you should invest in the project. Why or why not? What is the IRR of the investment? The required rate of return is 3.5%.arrow_forward
- 2arrow_forward6.2 (q4) A project requires an initial outlay of $150 and will result in a cash inflow of $220 in 5 years. What is the Internal Rate of Return of the project? a. 7% b. 9% c. 8% d. 6%arrow_forwardok ht ences A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows: Year 0 1 2 3 Cash Flow IRR -$27,400 11,400 14,400 10,400 If the required return is 16 percent, what is the IRR for this project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) % Should the firm accept the project? Yes O Noarrow_forward
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