Answered: A project has the following cash flows.…

A project has the following cash flows. What is the payback period? Year Cash Flow 0 −$10,000 1 1,800 2 3,600 3 5,000 4 6,000

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter11: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 7MC: Calculate the project cash flows for each year. Based on these cash flows and the average project...

See similar textbooks

Related questions

Q: Fernando Designs is considering a project that has the following cash flow and WACC data. What is…

A: The project's discounted payback can be calculated using discounted cash flows of the project.…

Q: The following table gives the cash flows for Project A and Project B: Year Project A Project B 0…

A: The project NPV needs to be calculated. Select the project with a higher NPV

Q: A project will generate the following cash flows. If the required rate of return is 15%, what is the…

A: To open the "NPV function" window - MS-Excel --> Formulas --> Financials --> NPV.

Q: Compute the NPV statistic for Project Y given the following cash flows if the appropriate cost of…

A: Net present value: Net present value is the difference between the present value of cash inflow and…

Q: Consider two investment projects with the following cash flow transactions: Compute the rate of…

A: YEAR PROJECT 1 PROJECT 2 0 -3000.00 -2000.00 1 0.00 1300.00 2 0.00 1500.00 3 0.00…

Q: Green Cars Inc. is considering a project with the following expected cash flows. Year Cash Flow…

A: Payback period : When cash inflows are uneven we use Payback period = E + B/C Where, E = Year…

Q: what is its initial cash outlay?

A: The payback period is one of the measures which has been used by the company in the project…

Q: Project A requires an initial outlay at t = 0 of $1,000, and its cash flows are the same in Years 1…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: A project has the following cash flows. What is the maximum number of Internal Rates of Return that…

A: Internal Rate of Return (IRR) is the rate at which net present value of the project becomes zero.…

Q: A project has the following cash flows below. What is the internal rate of return of this project?…

A: IRR Is the rate at which present value of future cash flows are equal to the cash outflows now. We…

Q: What is the net present value of a project with the following cash flows if the required rate of…

A: Net Present Value (NPV)NPV is the method of evaluating the worth of an investment or project by…

Q: Compute the NPV for Project X with the cash flows shown as follows if the appropriate cost of…

A: NPV (Net Present Value) is one of the important techniques of capital budgeting decisions that aims…

Q: A project is expected to generate the following cash flow stream. The required rate of returns is 9…

A: Solution:- Present value means the value of cash flows in today's terms by discounting the same at…

Q: There a project with the following cash flows: Year: 1, 2, 3, 4 Cash Flow: -$21,800 6,300 7,350…

A: Capital budgeting is a financial technique to evaluate a project's liquidity and profitability…

Q: 1. What is the net present value of a project with the following cash flows if the requiredrate of…

A: The difference between the present value of inflows and outflows is generated by the project over a…

Q: CSY Bhd is considering a project that has the following cash flow data. What is the project's…

A: PB Period refers to the time in which the company could cover the amount invested in the project.

Q: A project has annual cash flows of –€45,000, €35,000, €15,000 and €5,000. Required: What is the…

A: The payback period is the time period in which the amount invested is fully recovered from future…

Q: A project has the following cash flows : Year Cash Flows 0 −$11,900 1 5,230 2 7,540 3 4,960…

A: Reinvesting the cashflows over the investment horizon will provide the future value with the…

Q: What is the net present value of a project with the following cash flows if the discount rate is 12…

A: Computation:

Q: ompute the MIRR for Project Y and accept or reject the project with the cash flows shown as follows…

A: MIRR is modified internal rate of return in this reinvestment of the fund is considered that is why…

Q: ABC Company is considering a project that has the following cash flow data. Year…

A: Payback method is one of the capital budgeting technique which helps in evaluating profitability of…

Q: Watts Co. is considering a project that has the following cash flow and WACC data. What is the…

A: GIVEN, WACC = 10% YEAR CASHFLOW 0 -725 1 375 2 400 3 425 4 450

Q: Rayver Cruz is considering a project that has the following cash flow and WACC data. What is the…

A: MIRR requires the calculation of future value of cash inflows and the result is divided by the…

Q: Compute the NPV statistic for Project X given the following cash flows if the appropriate cost of…

A: Given information: Cost of capital is 12% Calculation of Net present value (NPV): Excel workings:

Q: A project has the following cash flows: Year 0 £10,500 initial investment Year 1 4,486 cash inflow…

A: Companies undertake numerous projects in order to enhance income or reduce expenses. A fantastic new…

Q: You are considering a project that has the following cash flow and WACC data. What is the project's…

A: Capital budgeting methods are the quantitative approaches that the top level management of the…

Q: What is the IRR for a project that has a net investment of $14,600 and a single net cash flow of…

A: Working note:

Q: A project has the following cash flows. What is the payback period? Year Cash Flow 0…

A: The payback period is firmly identified with the earn back the original investment point of any…

Q: The following information regarding an investment project is available. Discount rate 7% Year…

A: The net present value is an important method for capital budgeting. It refers to the difference…

Q: What’s the discount payback period of the projects? (compile a spreadsheet) Calculate NPV, PI, IRR ,…

A: Capital investments are long-term investments in which the assets involved have useful lives of…

Q: A project has the following cash flows: Year 0: 74000 Year 1: -49000 Year 2: -41000 What is the…

A: As you have asked a question with several parts, we will solve the first 3 parts as per policy of…

Q: What is the net present value of a project with the following cash flows and a required return of…

A: NPV is the sum of present value of future cashflows PV = cashflow/(1+rate)^year

Q: Consider the cash flows for the following investment projects: (a) For Project A. find the value of…

A: a. Projects A's investmenti(1+i)n(1+i)n-1 - Projects A's 1st year income = (X- Project A's 1st year…

Q: A project has the cash flows shown below. What is the Payback Period of this project? Year Cash Flow…

A: Payback period = years before payback period + (cumulative cash flow in the year before…

Q: Viva’s Junkshop is considering a project that has the following cash flow and WACC data. What is the…

A: The NPV can be calculated as present value of cash inflows less initial investment

Q: The following are a project's cash flows. Its cost of capital is 10% . What is the project's…

A: Formulas:

Q: Consider the cash flows for the following investment projects: (a) For Project A. find the value of…

A: The question is based on the concept of Capital Budgeting, where the present value of cash inflows…

Q: ABC Co. is considering a project that has the following cash flow data. What is the project's…

A: Payback Period The payback period is the method of capital budgeting that tells the total time taken…

Q: ABC Inc. is considering a project that has the following cash flow data. What is the project's IRR?…

A: IRR is the rate at which NPV of the project is zero

Q: Compute the Internal Rate of Return for a project with the following cash flows: Year Cash Flow 0…

A: Internal rate of return of the stock is the rate at which the Net Present Value of the project…

Q: The following table contains the estimated cash flows of a project. Assume the appropriate discount…

A: A discount rate at which the net present worth of an investment is equal to zero is term as internal…

Q: Consider the following two projects: Project Year 0 Year 1 Year 2 Year 3 Year 4 Discount Cash Flow…

A: Payback period for Project A can be calculated as below: Here, A = Last period or year in which the…

Q: For a project that has a net investment of $150,000 and net cash flows of $40,000 for 5 years; Is…

A: Given information: Project’s net investment is $150,000 Net cash flows of $40,000 for 5 years

Q: Bronx Steel, Inc., has a project with the following cash flows: Year Cash Flow 0 –$ 24,200 1…

A: IRR is the internal rate of return. It is that rate at which NPV (net present value) of an…

Q: A project has the following cash flows. Year 0 1 2 3 4 Amount -200 950 -850 75 12 You are a…

A: A discount rate at which the net present worth of an investment is equal to zero is term as an…

Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

A project has the following cash flows. What is the payback period?

Year	Cash Flow
0	−$10,000
1	1,800
2	3,600
3	5,000
4	6,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 General Introduction

VIEW

Step 2 Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Calculate the cash flows for each year. Based on these cash flows and the average project cost of capital, what are the projects NPV, IRR, MIRR, PI, payback, and discounted payback? Do these indicators suggest that the project should be undertaken?
Calculate the project cash flows for each year. Based on these cash flows and the average project cost of capital, what are the projects NPV, IRR, MIRR, PI, payback, and discounted payback? Do these indicators suggest that the project should be undertaken?
There is a project with the following cash flows : Year Cash Flow 0 −$ 29,300 1 8,600 2 8,500 3 7,900 4 6,700 What is the payback period?
A project has the following cash flows set out below. What is the profitability index of this project if the relevant discount rate is 2 percent? Enter your final answer to two decimal places. Year Cash flow 0 -1,745 1 537 2 2,066 3 3,912
What is the net present value of a project with the following cash flows if the required rate of return is 12 percent? YEAR CASH FLOW 0 -42,398 1 13,407 2 21,219 3 17,800
The expected cash flows of a project are as follows. Year Cash Flow -100000, 20,000 ,30,000 40,000 ,50,000 30,000 calculate the modified internal rate of return and payback period
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$ 15,456 5,225 8,223 13,013 8,705 0 1 234 -$ 276,363 26,400 51,000 57,000 402,000 Whichever project you choose, if any, you require a 6 percent return on your investment. a. What is the payback period for Project A? Payback period b. What is the payback period for Project B? Payback period c. What is the discounted payback period for Project A? Discounted payback period
What is the net present value of a project with the following cash flows if the discount rate is 12 percent? Year Cash flow 0 -27,500 1 14,800 2 19,400 3 7200
Given the following cash flows for project X and project Y, Year Project X Project Y 0 -55000 -100000 1 20000 15000 2 13500 17000 3 11000 19000 4 10000 25000 5 9000 30000 6 7500 35000 Calculate the NPV, IRR, MIRR and traditional payback period for each project, assuming a required rate of return of 7 percent If the projects are independent, which project(s) should be selected? If they are mutually exclusive, which project should be selected? (Answer in word form please)
*** By using the following table format, calculate: (a) Calculate the, the Payback Period, and the net Present Value of for each project. Calculation of Payback Period for each project: CUMULATIVE CASH FLOWS Project A Project B Project C £ £ £ Year 1 Year 2 Year 3 Year 4 Year 5 Payback Period (years and months) Calculation of Net Present Value for each project: Discount Factors Project A Project B Project C CF DCF CF DCF CF DCF £ £ £ £ £ £ Year 1 Year 2 Year 3 Year 4 Year 5 Total DCF Initial investment Net present value b) For each of the above methods of project appraisal recommend which project should be taken up. c) Using all the information gathered from the above techniques which…
Given the following cash flows for project A: C0 = -1000, C1 = +600 ,C2 = +400, and C3 = +1500, calculate the payback period)
Finance Here are the expected cash flows for three projects: Cash Flows (dollars) 1 2 0 5,800 - 1,800 + 1,200 + 1,200 0 + 1,800 - 5,800 + 1,200 + 1,200 Project Year: A B с 3 + 3,400 + 2,400 + 3,400 4 0 + 3,400 + 5,400 a. What is the payback period on each of the projects? b. If you use the payback rule with a cutoff period of 2 years, which projects will you accept? c. If you use a cutoff period of 3 years, which projects will you accept? d-1. If the opportunity cost of capital is 10%, calculate the NPV for projects A, B, and C. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) d-2. Which projects have positive NPVs? e. "Payback gives too much weight to cash flows that occur after the cutoff date." True or false? a. Payback period b. If you use the payback rule with a cutoff period of 2 years, which projects will you accept? C. If you use a cutoff period of 3 years, which projects will you accept?…