Better Biscuits is planning to make and sell a new cookie and expects the following cash flows at the end of each year: Year CF (in $ million) 0 1 2 3 -70 20 30 40 1: If the company requires a return of 8% from this project, what is the NPV (in $ million)?

A firm expects to make payments of 1.1, 1.5, 1.2, 1.4 and 1.9 million for a particular supply over each of the next 5 years.  What is the present value of this mixed cash flow stream if the annual rate is 10%?

Your company is considering a capital project that will require a net initial investment of $244,978. The project is expected to have a 7- year life and will generate an annual net cash inflow of $40,860. Using the present value tables, what is the internal rate of return? (Round answers to O decimal places, e.g. 25.) Click here to view the factor table. Internal Rate of Return %

You are evaluating a project that will cost $502,000, but is expected to produce cash flows of $127,000 per year for 10 years, with the first cash flow in one year. Your cost of capital is 10.7% and your company's preferred payback period is three years or less. a. What is the payback period of this project? b. Should you take the project if you want to increase the value of the company? a. What is the payback period of this project? The payback period is years. (Round to two decimal places.) b. Should you take the project if you want to increase the value of the company? (Select from the drop-down menus.) If you want to increase the value of the company you take the project since the NPV is will not will

A new D8 will cost you $600,000.  You estimate maintenance to be $14,000 at the end of each year (including year of sale), but major repairs at the end of year 4 will cost an additional $15,000. The machine will be sold for an estimated $300,000 at the end of year 5.  Calculate the annual cost of this investment at a 10% compound interest rate.  Your solution must be accompanied by a sketch of the cash flow diagram.

You have built a Free Cash Flow model for a company, and calculate that the FCF for the fifth year from today is $1,000 (i.e. an investor who owns the enterprise would receive FCF of $1,000 exactly five years from today). Assuming FCF grows at 3% each year forever from that point onwards, and that the WACC is 8%, calculate the PV today of the Terminal Value that is based on this perpetuity. (For the purposes of this question, only value FCF after the fifth year.)

Shannon Industries is considering a project which has the following cash flows: Year Cash Flow 0 ? 1 $2,000 2 3,000 3 3,000 4 1,500     The project has a payback of 2.5 years. The firm's cost of capital is 12 percent. What is the project's net present value NPV? Round it to a whole dollar, e.g., 1234.

Caspian Sea Drinks is considering buying the J - Mix 2000. It will allow them to make and sell more product. The machine cost $1.92 million and create incremental cash flows of $582, 193.00 each year for the next five years. The cost of capital is 9.20 %. What is the profitability index for the J - Mix 2000?

Midlife Crisis Inc. (MCI) has two assets: epsilon1,60 in cash and an investment project. The cash is invested in the risk-free asset which earns 5% per year. The project requires an investment of £800 today and generates an expected cash flow of £1,600 one year from now. This opportunity recurs perpetually each year. Thus, for example, one year from now MCI can again invest £800 and generate epsilon1,600 one year subsequent to that investment. MCI has 800 shares outstanding. The market equity risk premium is 5% per year, and the investment project has a CAPM beta of 1. Assume a Modigliani and Miller world. When answering this question, state any additional assumptions you may need to make. Show your calculations. (a) Should MCI invest in the project? Explain.  (b) Suppose MCI's CFO decides to pursue the project. What is the value of MCI? (c) Suppose MCI's CFO decides to take the project and always pay out all free cash flow as a dividend. What is MCI's cum-dividend price expected to be…

Suppose a company could invest in a machine that would be able to produce $1,000,000 worth of saleable merchandise in one year, $2,000,000 for another two years then $1,000,000 for another three years.  If the required rate of return for the company is 8%, what is the value of the machine's future cash flows to the company today?