A company forecasts a free cash flow of $55 million in Year 3, i.e., at t = 3, and it expects FCF to grow at a constant rate of 5.5% thereafter. If the weighted average cost of capital (WACC) is 10.0% and the cost of equity is 15.0%, then what is the horizon, or continuing, value in millions at t = 3? Group of answer choices $1,083 $1,148 $1,289 $1,186 $1,212

You have the following cash flows for the firm;   What is NPV, if discount rate is 10% ?   CF0 = -433 (CF0 is always negative. It is your initial investment) CF1 = 969 CF2 = 697 CF3 = 824 CF4 = 727 CF5 = 922

Find the present value of the following stream of a firm's cash flows, assuming that the firm's opportunity cost is 8%. End of year Cash flow 1 2 3 $5,000 $25,000 $14,000

7. Assume a company is going to make an investment of $300,000 in a machine and the following are the cash flows that two different products would bring in years one through four. The company's required rate of return is 12%. Option A                   Option B Product A                 Product B $190,000                    $150,000 190,000                      180,000 60,000                         60,000 20,000                         70,000 Using the appropriate EXCEL spreadsheet in the Chapter11 NPV IRR Analysis.xlsx Download Chapter11 NPV IRR Analysis.xlsx, answer the following questions: What is the NPV for Option A?  What is the NPV for Option B?  What is the IRR for Option A?  What is the IRR for Option B?  PLEASE NOTE #1: The dollar amounts will be with "$" and commas as needed and rounded to two decimal places (i.e. $12,345.67). Round your IRR answers, in percentage format, to two decimal places (i.e. 12.34%).  Given the above answers, which project should the…

A risky $420,000 investment is expected to generate the following cash flows: Year    1    2    3    4$    102,700        $    163,030        $    160,824        $    135,200    If the firm’s cost of capital is 12 percent, should the investment be made?. Use a minus sign to enter a negative value, if any. Round your answer to the nearest dollar.NPV: $   Should The investment   be made? An alternative use for the $420,000 is a four-year U.S. Treasury bond that pays $25,200 annually and repays the $420,000 at maturity. Management believes that the cash inflows from the risky investment are equivalent to only 70 percent of the certain investment, which pays 6 percent. Should the investment be made? Use Appendix B to answer the question. Do not round other intermediate calculations. NPV: $   Should The investment  be made?

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Solve Part B of the question

Q1/ Ipswich Corporation is considering an investment opportunity with the expected net cash inflows of $300,000 for four years. The residual value of the investment , at the end of four years, would be $70,000. The company uses a discount rate of 14\% and the initial investment is $290,000. Calculate the NPV of the investment.

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