A project requires a $33,000 initial investment and is expected to generate end-of-period annual cash inflows as follows Year 1 Year 2 $ 15,000 $ 16,000 Assuming a discount rate of 14%, what is the net present value (rounded to the nearest whole dollar) of this investment? Selected prese sum are shown in the table below. i = 14% n=1 88777 Year 3 $ 15,000 = 14% n=2 = 14% n=3

A project requires a $33,000 initial investment and is expected to generate end-of-period annual cash inflows as follows Year 1 Year 2 $ 15,000 $ 16,000 Assuming a discount rate of 14%, what is the net present value (rounded to the nearest whole dollar) of this investment? Selected prese sum are shown in the table below. i = 14% n=1 88777 Year 3 $ 15,000 = 14% n=2 = 14% n=3

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You are evaluating an investment project, which has a cost of $161,000 today and is expected to provide after-tax annual cash flows of $20,000 for seven years. In order to compute the MIRR, you are modifying the cash flows. Assuming the cost of capital is 9.1 percent, what is the terminal cash flow of the modified cash flows? Question 12 options: $173,074 $176,474 $178,474 $180,974 $182,874 $184,574
A project requires a $41,000 initial investment and is expected to generate end-of-period annual cash inflows of $18,500 for each of three years. Assuming a discount rate of 13%, what is the net present value of this investment? Selected present value factors for a single sum are shown in the table below: - 138 í = 138 n=2 1-13% n=3 n 1 0.8850 0.7831 0.6931
Myca Corporation has a project with the following cash flows. What is the value of1. the cash flows today assuming an annual interest rate of 10 percent? Year Cash Flow 1 $1,820 2 2,300 3 2,640 4 2,650
A project requires a $42,000 initial investment and is expected to generate end-of-period annual cash inflows as follows: Year 1 Year 2 $ 16,800 $ 10,400 i = 12% n = 4 0.8929 Assuming a discount rate of 12%, what is the net present value (rounded to the nearest whole dollar) of this investment? Selected present value factors for a single sum are shown in the table below: i = 12% n = 2 0.7972 Multiple Choice $0 $30,240 $(12,104) $33,826 Year 3 $ 14,800 $(8,174) Total $ 42,000 i = 12% n = 3 0.7118
Project L requires an initial outlay at t = 0 of $72,917, its expected cash inflows are $13,000 per year for 9 years, and its WACC is 14%. What is the project's IRR? Round your answer to two decimal places. %
H
An investment project provides cash inflows of $740 per year for 9 years. What is the project payback period if the initial cost is $1,480? A. 2.00 years B. 2.02 years C. 1.90 years D. 1.94 years E. 2.04 years What is the project payback period if the initial cost is $4,958? A. 6.70 years B. 6.77 years C. 6.37 years D. 6.83 years E. 6.50 years What is the project payback period if the initial cost is $7,400? A. 3.01 years B. Never C. 4.95 years D. 5.25 years E. 1.35 years
3) Consider the following two projects: Net Cash Flow Each Period Initial Outlay 1 2 3 4 Project A $4,000,000 $2,003,000 $2,003,000 $2,003,000 $2,003,000 Project B $4,000,000 0 0 0 $11,000,000 Calculate the net present value of each of the above projects, assuming a 14 percent discount rate. What is the internal rate of return for each of the above projects? Compare and explain the conflicting rankings of the NPVs and IRRs obtained in parts a and b above. If 14 percent is the required rate of return, and these projects are independent, what decision should be made? If 14 percent is the required rate of return, and the projects are mutually exclusive, what decision should be made?
D1. Account
The company will invest $150,000 in a project and average annual income $50,000. The investment will provide the following inflows: Year Cash inflow 1 $ 25,000 2 45,000 3 30,000 4 50,000 5 70,000 Calculate: Net present value at 15% discount factor. Payback period Accounting rate of return Note: 15% discount factor : Year 15% discount factor 1 0.8696 2 0.7561 3 0.6575 4 0.5718 5 0.4972
unc.3
A project which requires an investment of OMR 18,000, duration of the project is 2 years, average net cash inflows were OMR 12,000 and annual variable cost is OMR 8,000. Assuming a discount rate at 12%, evaluate the sensitivity of Initial Investment influencing NPV with above information. Select one: O A. 11.25% B. 12.67% O C. 16.87% D. 6.75%

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