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 requires an initial outlay at t = 0 of $25,000, its expected
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- . The initial cost of the project is 20,000 EUR. You assume that you will be able to generate cash inflows (for instance through subscriptions) from this project in the years 1-3 of 10,000 EUR each. The target interest rate is 10% per annum.. Write the formula and calculate NPV. Justify the result.arrow_forward2) see picturearrow_forwardProject L costs $65,000, its expected cash inflows are $11,000 per year for 7 years, and its WACC is 14%. What is the project's payback? Round your answer to two decimal places.arrow_forward
- A new project will have an intial cost of $12,000. Cash flows from the project are expected to be $6,000, $5,000, and $4,000 over the next 3 years, respectively. Assuming a discount rate of 12%, what is the project's PI? Question 6 options: 1.10 1.06 1.12 1.14 1.02arrow_forwardProject L requires an initial outlay at t = 0 of $80,291, its expected cash inflows are $14,000 per year for 9 years, and its WACC is 13%. What is the project's IRR? 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_forward
- Project 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_forwardYou have the choice to invest in a related project at time T+1. The required investment is $10 million, but will generate $1 million per year in the next ten years starting from time T+1. Using a rate of 8%, calculate the present value of the new project at time T.arrow_forwardProject L requires an initial outlay at t = 0 of $74,734, its expected cash inflows are $13,000 per year for 11 years, and its WACC is 13%. What is the project's IRR? Round your answer to two decimal placesarrow_forward
- Project L requires an initial outlay at t = 0 of $56,000, its expected cash inflows are $10,000 per year for 10 years, and its WACC is 14%. What is the project's payback? Round your answer to two decimal places.arrow_forwardProject L requires an initial outlay at t = 0 of $70,000, its expected cash inflows are $8,000 per year for 9 years, and its WACC is 12%. What is the project's MIRR? Do not round intermediate calculations. Round your answer to two decimal places. A %arrow_forwardProject L requires an initial outlay at t = 0 of $50,592, its expected cash inflows are $9,000 per year for 9 years, and its WACC is 11%. What is the project's IRR? Round your answer to two decimal places.arrow_forward
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