After these previous calculations, the project still requires a big initial investment, and other options are being considered. We were considering adapting our production line, in order to produce some parts for electric automobiles, this way, and after analyzing the possible market opportunities, we could expect to obtain net revenues of $40,000 per month for at least the next 8 years.    a)     What is the maximum that we should invest on this project if we consider a cost of capital of 4%?   b)     If we ask for a loan of 2,000,000 at an annual interest rate of 2% compounded semiannually, to be paid in 8 years, how much would you have to pay every semester to cover the loan?

You are considering the following two mutually exclusive investment opportunities. If your cost of capital is 13%, which is better. Explain your reasoning and support numerically. Capital is not rationed.  Opportunity A would cost $1000 and return $400 per year for 4 years. Opportunity B would cost $2200 and would return $1000 per year for 3 years.

Suppose you are running a capital budgeting analysis on a project with an estimated cost of $3 million.  The project is considered similar to the existing lines of businesses for the company.  Given the cash situation, the company will fund the project completely with a new debt of $3 million.  This new debt will be issued at 8% interest for 10 years.  The company has an estimated 11% WACC.  When conducting the capital analysis on this project, what should be your discount rate (cost of capital) for the project? Explain your answer briefly.

Caspian Sea Drinks is considering buying the J-Mix 2000. It will allow them to make and sell more product. The machine cost $1.54 million and create incremental cash flows of $552,182.00 each year for the next five years. The cost of capital is 11.42%. What is the internal rate of return for the J-Mix 2000?

Pharoah Company is considering a long-term investment project called ZIP. ZIP will require an investment of $123,338. It will have a useful life of 4 years and no salvage value. Annual cash inflows would increase by $82,500, and annual cash outflows would increase by $41,250. The company's required rate of return is 12%. Click here to view the factor table. Calculate the internal rate of return on this project. (Round answers to O decimal places, e.g. 15%.) Internal rate of return on this project is between Determine whether this project should be accepted? The project be accepted. % and %.

Do the following problems. You must show your work.c) Find the IRR and MIRR of the following project and make your decision. Assume that the project's cost of capital (or WACC) is 4%. Project X that costs $30 million is expected to generate $13m per year for 3 years. Is this project acceptable?

Your company is considering a high-risk project that could yield strong revenues but will involve a significant up-front investment. Because of this risk, top management is naturally concerned about how long it is likely to take to pay off that investment so that they can begin to realize profits. This project will require an investment of $200,000 and your five-year projection for inflows is: Year 1 – $50,000, Year 2 – $75,000, Year 3 – $125,000, Year 4 – $200,000, and Year 5 – $250,000. Your firm’s required rate of return is 18%. How long will it take to pay back your initial investment? Determine the answer to this question by using an excel file to determine the “Payback Period.” Note:The Payback period does not use the “time value of money” or “discounted-payback” method. Determine the answer to this question by using an excel file to determine the “Net Present Value of Money (NPV)” method. Note: The NPV method uses the“time value of money” or “discounted payback” method..

You are considering building a new facility. It will cost $98.8 million upfront. After​ that, it is expected to produce profits of $29.3 million at the end of every year. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 8.9%. Calculate the IRR.       Question content area bottom Part 1 The NPV of this investment opportunity is ​$enter your response here million. ​ (Round to one decimal​ place.)   The IRR of the project is enter your response here​%.

Your company is currently considering two investment projects. Each project requires an upfront expenditure of $25 million. You estimate that the cost of capital is 10% and the investments will produce the  after tax cash flows on the attached image . a)Calculate the payback period for both projects,then compare to identify which project the firm should undertake. b)Evaluate the advantages and disadvantages of using the payback method in investment decisions and assess the situations where it should be used .

You are considering making a movie. The movie is expected to cost 10.6 million up front and take a year to produce. After that, it is expected to make $4.7 million in the year it is released and $1.8 million for the following four years. What is the payback period of this investment? If you require a payback period of two years, will you make the movie? Does the movie have positive NPV if the cost of capital is 10.9% ?