Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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A project has an initial cost of $40,000, expected net
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- (Payback period, net present value, profitability index, and internal rate of return calculations) You are considering a project with an initial cash outlay of $72,000 and expected cash flows of $20,880 at the end of each year for six years. The discount rate for this project is 10.8 percent. a. What are the project's payback and discounted payback periods? b. What is the project's NPV? c. What is the project's PI? d. What is the project's IRR? a. The payback period of the project is years. (Round to two decimal places.)arrow_forwardProject L requires an initial outlay at t = 0 of $47,000, its expected cash inflows are $11,000 per year for 8 years, and its WACC is 14%. What is the project's payback? Round your answer to two decimal places. yearsarrow_forwardPlease show steps or formula, not excel. Project L costs $41,531.18, its expected cash inflows are $9,000 per year for 9 years, and its WACC is 14%. What is the project's IRR? Round your answer to two decimal places.arrow_forward
- 2) see picturearrow_forwardA project has an initial cost of $55,000, expected net cash inflows of $14,000 per year for 6 years, and a cost of capital of 11%. What is the project's NPV? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to the nearest cent.arrow_forwardProject L requires an initial outlay at t = 0 of $60,000, its expected cash inflows are $9,000 per year for 11 years, and its WACC is 10%. What is the project's payback? Round your answer to two decimal places. yearsarrow_forward
- Please show your work Project L costs $55,903.24, its expected cash inflows are $12,000 per year for 10 years, and its WACC is 9%. What is the project's IRR? Round your answer to two decimal places. _____________ %arrow_forwardACCT 102 - Please Do All Subpartsarrow_forward(Paybackperiod, NPV, PI, and IRR calculations) You are considering a project with an initial cash outlay of $80,000 and expected free cash flows of $26,000 at the end of each year for 6 years. The required rate of return for this project is 7 percent. a. What is the project's payback period? b. What is the project's NPV? c. What is the project's PI? d. What is the project's IRR?arrow_forward
- Project L requires an initial outlay at t = 0 of $55,000, its expected cash inflows are $12,000 per year for 9 years, and its WACC is 9%. What is the project's MIRR? Do not round intermediate calculations. Round your answer to two decimal places.arrow_forwardYou are evaluating a project that will cost $500,000 but is expected to produce cash flows of $125,000 per year for 10 years, with the first cash flow in one year. Your cost of capital is 11% and your company's preferred payback period is three years or less. What is the payback period of this project? The payback period is ____ years. (Round to two decimal places)arrow_forwardProject A has a NPV of $100 and will last for 10 years. Project B has an NPV of $75 and will last for 5 years. What is the Equivalent Annual Amount for the project you should pick if your cost of capital is 10 % ? Round your answer to 2 decimal places.arrow_forward
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