Consider the following: Year Cash Flow 0 -$8,000 1 $200 2 $400 3 ? 4 $500 $700 LO 5 The required rate of return is 8%. Find the minimum amount you would have to receive as a cash flow in year 3 and still recommend the project. Answer to 2 decimals places. 8,349.32

Consider the following: Year Cash Flow 0 -$8,000 1 $200 2 $400 3 ? 4 $500 $700 LO 5 The required rate of return is 8%. Find the minimum amount you would have to receive as a cash flow in year 3 and still recommend the project. Answer to 2 decimals places. 8,349.32

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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Complete the following 6 Wk 3 Financial Exercises: Problem Set 1, Part 2 problems: 1. Calculate the net present value (NPV) of the following cash flow stream if the required rate is 12%: Insert your NPV calculation. Year Cash Flow Is this a good project for the business to accept? Explain why or why not. Insert your answer. 2. Calculate the NPV of the following cash flow projections based on a required rate of 10.5%: Insert your NPV calculation. Year Cash Flow Is this a good project for the business to accept? Explain why or why not. Insert your answer. 3. A company needs to decide if it will move forward with 2 new products that it is evaluating. The 2 initiatives have the following cash flow projections: Project A Project B Year Cash Flow Year Cash Flow Based on the risk of each project, the company has a required rate of return of 11% for Project A and 11.5% for Project B. The company has a $1.5 million budget to spend on new projects for the year. Should the company move forward…
A firm evaluates all of its projects by applying the IRR rule. Year Cash Flow 0 1 2 3 162,000 54,000 85,000 69,000 What is the project's IRR? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Internal rate of return %
Help Save & Exit What amount of cash would result at the end of one year, If $14,000 is Invested today and the rate of return Is 12%? (PV of $1 and PVA of $1) (Use approprlete factor(s) from the tables provided. Round your answer to the nearest dollar.) Multiple Choice $15,680 $14,000 $15,540 $12.320
A firm evaluates all of its projects by applying the IRR rule. Cash Flow Year 0 1 2 3 147,000 69,000 70,000 54,000 What is the project's IRR? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Internal rate of return % If the required return is 16 percent, should the firm accept the project?
Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 −$350,000 −$35,000 1 25,000 17,000 2 70,000 11,000 3 70,000 17,000 4 430,000 11,000 Assume you require a 15 percent return on your investment and a payback of 4 years. a. If you apply the discounted payback criterion, which investment will you choose? Why? b. If you apply the NPV criterion, which investment will you choose? Why? c. Based on your answers in (a) and (b), what you can say anything about the IRR of both projects? which project will you finally choose? Why?
Manshukh
S A firm evaluates all of its projects by applying the IRR rule. Year 0 1 2 3 Cash Flow -$ 41,000 20,000 23,000 14,000 a. What is the project's IRR? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. If the required return is 14 percent, should the firm accept the project? a. Internal rate of return b. Project acceptance %
A) Consider the following two mutually exclusive projects: Cash flow (A) -RM300,000 20,000 50,000 50,000 390,000 i) ii) Year 0 1 2 3 4 Cash flow (B) -RM40,000 19,000 12,000 18,000 10,500 If you apply the payback criterion, which investment will you choose if you set the maximum payback period of 3 years? If you apply the internal rate of return (IRR) criterion, which investment will you choose, if you require a 15% return?
Consider two projects, A and B. Year 0 1 2 Cashflow (in £) for A -4,000 1,882 4,000 Find the value of X if the positive internal rate of return (IRR) for both projects are the same. Give your answer to 2 decimal places. Cashflow (in £) for B -2,000 -4,000 X
Use python to answer the following question: Question 5 A capital investment in an equipment with an upfront cost of $23,540 will provide you with the following annual cash flow stream (paid end of year): 1. $2,000 2. $1,456 3. $3,230 4. $6,850 5. $2,384 6. $1,234 7. $5,987 8. $4,190 The project will incur the following cost for maintenance and repair (paid end of year): Year 3: ($2,984) Year 4: ($1,837) Year 6-8: ($2,000) Calculate the NPV of the investment and comment on whether you should invest in the project. Why or why not? What is the IRR of the investment? The required rate of return is 3.5%.
Your required return is 15%. Should you accept a project with the following cash flows? Year 0 1 2 3 Cash Flow −$85 $40 $40 $35 Group of answer choices No, because the IRR is 13.92%. No, because the IRR is 14.73%. Yes, because the IRR is 16.21%. Yes, because the IRR is 17.19%.

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