company is considering an investment where the estimated cash flows are as follows: Year Cash Flow 0 (100000) 1 60000 2 80000 3 40000 4 30000 The company cost of capital is 13%. What is the NPV? 51800 61871 56800 122000 51000
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A company is considering an investment where the estimated cash flows are as follows: Year Cash Flow 0 (100000) 1 60000 2 80000 3 40000 4 30000 The company cost of capital is 13%. What is the NPV?
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- Assume a company is going to make an investment of $450,000 in a machine and the following are the cash flows that two different products would bring in years one through four. Which of the two options would you choose based on the payback method?Suppose a firm estimates its overall cost of capital for the coming year to be 10%. What might be reasonable costs of capital for average-risk, high-risk, and low-risk projects?Vu Trading Company is evaluating a project that has the estimated cash flows given here. The cost of capital is 14%. What is the project’s NPV? b. What is the profitability index? Year 0 1 2 3 4 Cash flow −100,000 30,000 30,000 60,000 60,000
- What is the net present value of a capital investment project that has the followingaftertax cash flows for a company that requires a 15% rate of return on the project?Time Cash Flow0 -$4,0001 5002 2,0003 5,0001.A company is considering a R250 000 investment with the following cash flows Year 1 : R30 000 Year 2: R60 000 Year 3: R120 000 Year 4: R130 000 Year 5: R160 000 a) Determine the payback period of the investment ( present in table format) b) If the company wants to recover its initial investment in year 3, is the investment worthwhile? c) Identify and explain any 3 advantages of using payback method.16. You are considering an investment with the following cash flows: Year Cash Flow 0 -$50,000 1 $ 7,000 2 $ 4,000 3 $9,000 4 $61,000 What is the internal rate of return (IRR) for this investment? SHOW WORK
- Consider an investment with the following cash flows: Year Cashflows PV of P 1 @ 14% 0 (P 31,000) 1.000 1 10,000 .877 2 20,000 .770 3 10,000 .675 4 10,000 .592 Salvage value 5,000 The cost of capital is 14%. What is the profitability index (PI)? 1.842 1.824 1.482 1.284a firm wants to start a project. A team of financial analysts estimated the following cash flows; Year Cash flow 0 -$100000 1 $55000 2 $43000 3 $45000 1. Suppose the discount rate (interest rate) is 12%, what is the NPV? 2. Suppose that the discount rate (interest rate) is 12%, according to the calculation of NPV we should? 3. the payback period is? 4. Based on the payback period calculations and if the cut off point is 2 years, the project should? 5. Suppose that the discount rate (interest rate) is 12%, the profitability index (PI) is? 6. suppose that the discount rate (interest rate) is 12% based on the PI calculation, the project should?For the given cash flows, suppose the firm uses the NPV decision rule.Year Cash Flow0 −$ 159,0001 57,0002 82,0003 66,000. a. At a required return of 8 percent, what is the NPV of the project. b. At a required return of 19 percent, what is the NPV of the project.
- What is the NPV of the estimated cash flows for the following project using a Weighted Average Cost of Capital of 7.0%? Year 0 1 2 3 Cash Flow -140 50 70 90 Group of answer choices 47.54 38.63 59.94 70.00 41.34A firm wants to start a project. A team of financial analysts estimated the following cash flows year cash flow 0 -$100,000 1 55,000 2 43,000 3 45,000 Suppose that the discount rate (interest rate) is 12%. The profitability index (PI) is Group of answer choices 15,416.59 1.15 0.87 2.15For the given cash flows, suppose the firm uses the NPV decision rule. Year Cash Flow -$ 155,000 61,000 78,000 62,000 1 2 3 At a required return of 10 %, what is the NPV of the project? At a required return of 19%, what is the NPV of the project?
