f you insulate your office for $29,000, you will save $2,900 a year in heating expenses. These savings will last forever. a. What is the NPV of the investment when the cost of capital is 5%? 10%? b. What is the IRR of the investment? (Enter your answer as a whole percent.) c. What is the payback period on this investment?
Q: ,what is the NPV of this investment?
A: Net Present Value: It is a measure of profitability and shows the absolute profit or loss made from…
Q: 17
A: The computation of the IRR as follows:
Q: Your firm has taken on cost saving measures that will provide a benefit of $11,000 in the first…
A: First year benefits (C) = $11,000 Annual growth rate (g) = - 0.03 (-3%) Interest rate (r) = 0.09…
Q: You are considering an investment for which you require a rate of return of 8.5 percent. The…
A: Companies have different alternatives to invest their money in, but they should always compare the…
Q: You are considering an investment that will cost $15,000 and generate returns of $4,000 at the end…
A: Whenever an individual or a corporation has to evaluate the investment based upon the feasibility of…
Q: You have an opportunity to invest $107,000 now in return for $79,700 in one year and $29,800 in two…
A:
Q: You are considering an investment that will cost $15,000 and generate returns of $4,000 at the end…
A: NPV is the sum of present value of future cashflows less initial investment
Q: 4.Calculate the NPV if you spend $2M on a factory and produce 50k widgets per year and sell them for…
A: The net present value method considers the time value of money. The net present value is the excess…
Q: f you put up $1,250 in a one-year investment and get back $1,350. What rate is this investment…
A: Time period is 1 year Present Value is $1,250 Future Value is $1,350 To Find: Rate on this…
Q: You have an opportunity to invest $100,000 now in return for $79,700 in one year and $30,100 in two…
A: The net present value (NPV) is a financial metric that helps in finding out the total value of an…
Q: If an investment project costs a firm £200 and yields a stream of profits of £100 per year for the…
A: Internal rate of return(IRR) is one of the techniques of capital budgeting that take into…
Q: You have an opportunity to invest $50,400 now in return for $60,100 in one year. If your cost of…
A: Net Present value equal to present value of cash flow minus initial investment
Q: You have an opportunity to invest $100,000 now in return for $79,600 in one year and $30,300 in two…
A: Given: Year Particulars Amount 0 Initial investment -$100,000 1 Cash inflows $79,600 2 Cash…
Q: A company has an investment project that would cost $10 million today and yield a payoff of $15…
A: If present value of future value is more than initial investment than investment is accepted.
Q: o Consider an investment that costs $100,000 and has a cash inflow of $25,000 every year for 5…
A: Note: It is a case where no sub-parts are specified to solve among the multiple sub-parts posted, so…
Q: You are looking at an investment that will pay you $22,995 in year 2, $43,270 in year 4 and $41,525…
A: The present worth of the investment will include the discounted value of all single payment which…
Q: If you insulate your office for $16,000, you will save $1,600 a year in heating expenses. These…
A: Net Present Value: The net present value is the Net of the present value of future cash inflow and…
Q: 1.) a heat exchanger costs ₱36,000, but it will save ₱5000 per year in energy costs. if the interest…
A: Present value refers to the current valuation for a future sum. Investors determine the present…
Q: An investment has a cost of $3500. The investment will have a payout at the end of the first year.…
A: Approach: Let's assume the desired minimum payout is P.We will roll out the yearly payout…
Q: You have the opportunity to make an investment that costs $1.000,000. If you make this investment…
A: The net present value of the investment can be calculated with the help of discount rate. If the…
Q: Your firm has a potential project that will cost $5,000 now to begin. The project will then generate…
A: NPV means PV of net benefit arises from the future. It can be simple calculated by taking difference…
Q: If you insulate your office for $16000 you will save 1600 a year in heating exp. these savings will…
A: The provided information are: Initial Investment = $16000 Saving = $1600
Q: You have an opportunity to invest $106,000 now in return for $79,300 in one year and $29,100 in…
A: Data given: Initial Investment ($) = 106,000 Cash flow(Year 1) = $ 79300 Cash flow (Year 2) = $…
Q: A project whose machinery and installation cost $15,000, promises a net stream of savings of…
A: Given that;The cash flows are:Year 0: -$15,000Year 1: $3,000Year 2: $3,000Year 3: $3,000Year 4:…
Q: You have an opportunity to invest $100,000 now in return for $80,000 in one year and $30,000 in…
A: The NPV is calculated as present value of cash inflows less initial investment
Q: Whichoption is better: receive $160,000 now or $50,000, $25,000, $55,000, $30,000, and…
A: If Present value of Cash inflows is more than present value of cash outflows net present value is…
Q: You have an opportunity to invest $106,000 now in return for $80,100 in one yoar and $30.400 in two…
A:
Q: How would you set up the function in Excel to get the IRR of an investment of $22,500 over 6 years,…
A: Internal Rate of Return: The Internal Rate of Return (IRR) is the required rate of return at which…
Q: If you insulate your office for $12,000, you will save $1,200 a year in heating expenses. These…
A: Net present value is the excess of the present value of cash inflows over the present value of cash…
Q: A new machine will cost $400,000 and generate after-tax cash inflows of $50,000 for 12 years. Find…
A: Cost of the machine = $400,000 After tax cash inflow of $50,000 for 12 years Opportunity cost is 11%…
Q: If you insulate your office for $19,000, you will save $1,900 a year in heating expenses. These…
A: a.Initial Investment = $19,000Saving in heating expense = $1,900 Calculation of NPV of the…
Q: If you insulate your office for $18,000, you will save $1,800 a year in heating expenses. These…
A: Formula: NPV = Present values of cash inflows - Present values of cash outflows. Deduction of…
Q: You have an opportunity to invest $104,000 now in return for $79,100 in one year and $30,100 in two…
A: Solution:- Net Present Value (NPV) means the net value in today’s terms after adjusting initial…
Q: Suppose you wish to purchase a factory that will yield an annual return of $12,000 for 12 years,…
A: Here, Required Return on Investment is 8.25% Annual Return from Investment is $12,000 Time Period of…
Q: of $10 million. Investment A will generate $2 million per year (starting at the end of the first…
A: IRR is the internal rate of return where net present value is zero that means present value of cash…
Q: You have an opportunity to invest $50,600 now in return for $60,800 in one year. If your cost of…
A: Net Present Value(NPV) is one of the modern techniques of capital budgeting which considers the time…
Q: Find the IRR for an investment
A: IRR or internal rate of return of an investment can be defined as the discount rate at which the net…
Q: You are considering an investment in a clothes distributer. The company needs $105,000 today and…
A: Initial Cash outflow = C0 = $ 105,000; Cash inflow next year = C1 = $ 120,000If R is the IRR then,…
Q: You are deciding between two mutually exclusive investment opportunities. Both require the same…
A: Part A IRR for Investment A = Perpetual cash flow Initial amount invested IRR for Investment A…
Q: An investor is considering a project which requires an outlay of 3 million pounds initially (t = 0),…
A: Internal rate of return (IRR) is a metric used by corporations to determine the rate of return on…
Q: you want to invest in a new technology, which cost now $100.000. In 4-year long-term, it gives you…
A: Net present value (NPV) is used to determine the present value of all future cash flows. Net present…
Q: You are deciding between two mutually exclusive investment opportunities. Both require the same…
A: The internal rate of return is a capital budgeting technique that helps in calculating a discount…
Q: You are purchasing a factory at $550,000. Your projected cash flow streams from the factory will be…
A: Rate of Return for an investment is the yield rate. Every investment decision is based on the return…
Q: If you insulate your office for $15000 you will save 1500 a year in heating exp. these savings will…
A: The provided information are: Initial Investment = $15000 Saving = $1500
Q: Consider an investment that costs $100,000 and has a cash inflow of $25,000 every year for 5 years.…
A: Initial cost (C) = $100000 Annual cashflow (A) = $25000 n = 5 years r = 9% Let IRR = i
f you insulate your office for $29,000, you will save $2,900 a year in heating expenses. These savings will last forever.
a. What is the
b. What is the
c. What is the payback period on this investment?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
- Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated revenue producing life of 4 years. Falkland has a cost of capital of 8%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?If you insulate your office for $18,000, you will save $1,800 a year in heating expenses. These savings will last forever. a. What is the NPV of the investment when the cost of capital is 4%? 10%? b. What is the IRR of the investment? (Enter your answer as a whole percent.) c. What is the payback period on this investment?If you insulate your office for $19,000, you will save $1,900 a year in heating expenses. These savings will last forever. a. What is the NPV of the investment when the cost of capital is 5%? 10%? b. What is the IRR of the investment? c. What is the payback period on this investment?
- If you insulate your office for $16000 you will save 1600 a year in heating exp. these savings will last forever. 1. What is the NPV of the investment when the cost of capital is 5% and 10% 2. What is the IRR of the investment? 3. what is the payback period on this investment?Consider a project in which you have to invest $15,000 today and you will receive $24847 in one year. What is the internal rate of return (IRR) of this project? The IRR is % (Keep 2 decimal places). Answer:You have an investment opportunity that requires an initial investment of $5,000 today and will pay $6,000 in one year. What is the rate of return of this opportunity? The rate of return for this opportunity is ____%.
- Suppose you invest $3,000 today and receive $10,000 in 25 years. a. What is the internal rate of return (IRR) of this opportunity? b. Suppose another investment opportunity also requires $3,000 upfront, but pays an equal amount at the end of each year for the next 25 years. If this investment has the same IRR as the first one, what is the amount you will receive each year? a. What is the internal rate of return (IRR) of this opportunity? The IRR of this opportunity is%. (Round to two decimal places.) b. Suppose another investment opportunity also requires $3,000 upfront, but pays an equal amount at the end of each year for the next 25 years. If this investment has the same IRR as the first one, what is the amount you will receive each year? The periodic payment that gives the same IRR is $ (Round to the nearest cent.)f you insulate your office for $16,000, you will save $1,600 a year in heating expenses. These savings will last forever. a. What is the NPV of the investment when the cost of capital is 5%? 10%?You have been offered a unique investment opportunity. If you invest $8,800 today, you will receive $440 one year from now, $1,320 two years from now, and $8,800 ten years from now. a. What is the NPV of the opportunity if the cost of capital is 6.6% per year? Should you take the opportunity? b. What is the NPV of the opportunity if the cost of capital is 2.6% per year? Should you take it now? a. What is the NPV of the opportunity if the cost of capital is 6.6% per year? If the cost of capital is 6.6% per year, the NPV is $ (Round to the nearest cent.)
- You have been offered a unique investment opportunity. If you invest $8,900 today, you will receive $445 one year from now, $1,335 two years from now, and $8,900 ten years from now. a. What is the NPV of the opportunity if the cost of capital is 6.7% per year? Should you take the opportunity? b. What is the NPV of the opportunity if the cost of capital is 2.7% per year? Should you take it now?If you insulate your office for $16,000, you will save $1,600 a year in heating expenses. These savings will last forever. a. What is the NPV of the investment when the cost of capital is 5%? 10%?You have been offered a unique investment opportunity. If you invest $9,500 today, you will receive $475 one year from now, $1,425 two years from now, and $9,500 ten years from now. a. What is the NPV of the opportunity if the cost of capital is 5.2% per year? Should you take the opportunity? b. What is the NPV of the opportunity if the cost of capital is 1.2% per year? Should you take it now? C a. What is the NPV of the opportunity if the cost of capital is 5.2% per year? If the cost of capital is 5.2% per year, the NPV is $. (Round to the nearest cent.) Should you take the opportunity? (Select from the drop-down menu.) You take this opportunity. b. What is the NPV of the opportunity if the cost of capital is 1.2% per year? If the cost of capital is 1.2% per year, the NPV is $ Should you take it now? (Select from the drop-down menu.) You take this opportunity at the new cost of capital. (Round to the nearest cent.)