Green Inc. is considering Projects S and L. However company has lost investment information for Project L. Paybackperiod for both projects are the same. The cash flows for both the projects are shown below What is the IRR of theproject with higher NPV?WACCCFSCFL13.65%14.0%15.16%8.0%9.95%11.52%01$1,710 $520 $570 $620-SX.$670 $620 $570$670$520 A project requires certain investment X today. It's profitability index is 1.20. The project is evaluated based on thefirm's 15% cost of capital. Year 1 this project will generate cash inflow of $50,000. This cash flow will increase by$25,000 each year for years 2 through 5. In other words, starting year 1, the cash flow will be $50,000 and this willincrease by additional $25,000 for years 2 through 5. What is the project's Internal rate of return, the IRR20.01%21.76 %16.29%15.47%

Payback period is the period required to recover initial cash flow of the project and is one simple…

Answered: dering Projects ver company has lost…

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

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3 https://pwcollege.brightspace.com/d21/le/content/6894/viewContent/7549/View?ou=6894 T 01 2 Cost Pay Back and NPV A company is considering investing in a project to expand the facilities for customers. There are two different ways of doing this and they have each been costed. Projected net cash flow into the company has also been estimated. Project 2 £115,000.00 Year Expected Contributions 1 3 4 Automatic Zoom 5 Project 1 £120,000.00 6 £50,000.00 £40,000.00 £50,000.00 £45,000.00 £50,000.00 £50,000,00 £40,000.00 £40,000.00 £45,000.00 £30,000.00 a. If the company used the payback method, when does each project pay for itself? b. If the company were to employ a discount rate of 12%, what would be the NPV of each project? CIRR to > A view as TexT DOWI £50,000.00 £30,000.00
A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 1 2 3 4 Project S -$1,000 $870.95 $260 $5 $10 Project L -$1,000 $5 $260 $400 $803.94 The company's WACC is 8.0%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places. %
Calculate IRR of projects S and L, IRRS & IRRL IRRS IRRL UF Company is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and are not repeatable. WACC: 7.75% Year 0 1 2 3 4 CFS ($1,050) $700 $625 CFL ($1,050) $370 $370 $360 $360
Find the crossover rate. UF Company is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and are not repeatable. WACC: 7.75% Year 0 1 2 3 4 CFS ($1,050) $700 $625 CFL ($1,050) $370 $370 $360 $360
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Net Cash Flows and NPVs for different discount rate for projects S and L are given below Net Cash Flows ($) Discount Rate (%) NPVS NPVL Year (t) Project S Project L 0% $800 $1100 0 $(3000) $(3000) 5 554.32 1 1500 400 10 161.33 2 1200 900 15 (90.74) (259.24) 3 800 1300 20 (309.03) (565.97) 4 300 1500 e) What is the IRR for L? (Write down the equation for IRR and then Use an excel worksheet to calculate IRR Equation: Answer: f) What is the cross-over rate? (Write down the equation for IRR and then Use an excel worksheet to calculate IRR Equation: ANSMER:
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Two anti-pollution project proposals are being considered by Energon Industries. The expected cash w we flows are as follows: End of Year Project 1 Project 2 - P3.5M - P4.5M 1 - 0.25M -0.125M - 0.375M -0.25M - 0.5M - 0.375M 4 - 0.625M -0.5M 5 - 1.55M -0.625M Using the incremental investment approach and a 12% MARR, determine the better alternative (Ans. i2-1 = 9.17%; select Project 1) 3.
. Net Cash Flows and NPVs for different discount rate for projects S and L are given below Net Cash Flows ($) Discount Rate (%) NPVS NPVL Year (t) Project S Project L 0% $800 $1100 0 $(3000) $(3000) 5 554.32 1 1500 400 10 161.33 2 1200 900 15 (90.74) (259.24) 3 800 1300 20 (309.03) (565.97) 4 300 1500 h) If projects are independent (not mutually exclusive), which project(s) would you accept? i) at 5% ii) at 15%
UF Company is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and are not repeatable. WACC 7.5% Year 0 1 2 3 4 CFS ($1,050) $700 $625 CFL ($1,050) $370 $370 $360 $360 Question: Calculate IRR of projects S and L, IRRS & IRRL (show in excel format with spreadsheet inputs)
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dering Projects ver company has lost investment information for Project period for both projects are the same. The cash flows for both the projects are shown below What is the IRR project with higher NPV? WACC 8.0% CFS CFL 13.65% 14.0% 0 $1,710 $520 $570 $620 5670 -SX. 3670 $620 $570 $520