A company is considering investing in a new project that requires an initial investment of $1,000,000. The projected cash flows from the project are as follows:   Year 1: $300,000 Year 2: $400,000 Year 3: $500,000 Year 4: $600,000   The company's required rate of return for similar projects is 12%. What is the Net Present Value (NPV) of the project?  What is the Internal Rate of Return (IRR) of the project? YOU MUST SHOW CALCULATIONS TO BACK UP YOUR SELECTION.   -$100,000// 12%   $250,000 // 10%   $250,000 // 14%   $350,000 // 14%   $50,000 // %14

You are evaluating a project that will cost $502,000, but is expected to produce cash flows of $127,000 per year for 10 years, with the first cash flow in one year. Your cost of capital is 10.7% and your company's preferred payback period is three years or less. a. What is the payback period of this project? b. Should you take the project if you want to increase the value of the company? a. What is the payback period of this project? The payback period is years. (Round to two decimal places.) b. Should you take the project if you want to increase the value of the company? (Select from the drop-down menus.) If you want to increase the value of the company you take the project since the NPV is will not will

FB Company is considering investing in two construction projects, and he developed the following estimates of the cash flows. His required return is 10% and views these projects as equally risky. Year     Project 1 cash flow       project 2 cash flow 0           -550000                        -700000 1           150000                         200000 2           200000                        150000 3           150000                        250000 4            150000                     150000 5            100000                    150000   Required: a)  Calculate the net present value (NPV) of each project, assess its acceptability, and indicate which project is best using NPV. b)  Calculate the profitability index (PI) of each project, assess its acceptability, and indicate which project is best using PI. c)  If both the projects have recorded a positive NPV value and the projects are mutually exclusive, which projects would you recommend for FB Company to undertake? Why?

The following are two projects a firm is considering: Project B Cash Flow Year 0 1 2 3 4 $2,939.01 Assuming that the relevant cost of capital for both projects is 11%, you should be able to determine the net present value (NPV) and the internal rate of return (IRR) for both project. Assume now that the firm has capital rationing, but knows that its true reinvestment rate is 20%, while its cost of capital is 11 percent. Given this information, determine the modified net present value (MNPV) for Project B. O $2.479.00 O $2.965.10 O$3.479.89 Project A Cash Flow O $4,084.05 ($10,000.00) ($11,000.00) $3,000.00 $5,000.00 $4,000.00 $4,000 00 $5,000.00 $4,000.00 $2,000.00 $2,000.00

Company XYZ is considering an investment project that is expected to generate the following cash flows: Year 1: $500,000 Year 2: $700,000 Year 3: $800,000 Year 4: $900,000 Year 5: $1,200,000 The cost of capital for the company is 10%. Calculate the Firm's Present Value (FPV) of the cash flows. To calculate the Firm's Present Value (FPV) of the cash flows, you need to discount each cash flow to its present value using the cost of capital, and then sum up the present values of all cash flows.

Shannon Industries is considering a project which has the following cash flows: Year Cash Flow 0 ? 1 $2,000 2 3,000 3 3,000 4 1,500     The project has a payback of 2.5 years. The firm's cost of capital is 12 percent. What is the project's net present value NPV? Round it to a whole dollar, e.g., 1234.

Connor Corporation is considering two projects (see below). For your analysis, assume these projects are mutually exclusive with a required rate of return of 12%.   project 1 project 2 initial investment $(510,000) $(685,000) cash flow year 1 485,000 610,000 Compute the following for each project:   NPV (net present value) PI (profitability index) IRR (internal rate of return)   Based on your analysis, answer the following questions :   Which is the best choice? Why? Which project should be selected and why? If the projects had the same IRR amounts but different NPV totals, then how would you know which project to select? Explain.

For the given cash flows, suppose the firm uses the NPV decision rule. Year Cash Flow 0-$ 150,000 1 66, 000 2 73,000 3 57,000 a. At a required return of 10 percent, what is the NPV of the project? b. At a required return of 20 percent, what is the NPV of the project?

​(​NPV, ​PI, and IRR calculations​) Fijisawa Inc. is considering a major expansion of its product line and has estimated the following free cash flows associated with such an expansion. The initial outlay would be ​$1,850,000​, and the project would generate incremental free cash flows of ​$600,000 per year for 5 years. The appropriate required rate of return is 9 percent.   a. Calculate the NPV. b. Calculate the PI. c. Calculate the IRR. d. Should this project be​ accepted?

You are considering opening a new plant. The plant will cost $95.1 million up front and will take one year to build. After that it is expected to produce profits of $31.8 million at the end of every year of production. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 7.6%. Should you make the investment? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. The NPV of the project will be $ million. (Round to one decimal place.)