lue Llama Mining Company is analyzing a project that requires an initial investment of $3,225,000. The project’s expected cash flows are: Year Cash Flow Year 1 $325,000 Year 2 –100,000 Year 3 425,000 Year 4 500,000   1. Blue Llama Mining Company’s WACC is 7%, and the project has the same risk as the firm’s average project. Calculate this project’s modified internal rate of return (MIRR): 17.53%

A project requires an initial investment of $225,000 and is expected to generate the following net cash inflows: Year 1: $95,000 Year 2: $80,000 Year 3: $60,000 Year 4: $55,000 Required: Compute net present value of the project if the minimum desired rate of return is 12%. Calculate the following: Payback Period NPV IRR

Benson Designs has prepared the following estimates for a​ long-term project it is considering. The initial investment is ​$26,020​, and the project will yield cash inflows of $8,000 per year for 5 years. The firm has a cost of capital of 8​%.   a.  Determine the net present value​ (NPV) for the project. b.  Determine the internal rate of return​ (IRR) for the project. c.  Would you recommend that the firm accept or reject the​ project?

Cold Goose Metal Works Inc. is a small firm, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Delta's expected future cash flows. To answer this question, Cold Goose's CFO has asked that you compute the project's payback period using the following expected net cash flows and assuming that the cash flows are received evenly throughout each year. Complete the following table and compute the project's conventional payback period. For full credit, complete the entire table. (Note: Round the conventional payback period to two decimal places. If your answer is negative, be sure to use a minus sign in your answer.) Expected cash flow Cumulative cash flow Conventional payback period: Cash flow $ Discounted cash flow $ Cumulative discounted cash flow $ Discounted payback period: Year 0 -$6,000,000 O The discounted payback period O The regular payback period O $1,714,226 $3,957,217 years The conventional payback period…

Elizabeth Corporation is starting two new projects. Project A requires an investment of $5,000, has expected return of 16% with standard deviation 14%. Project B has initial investment of $15,000, expected return of 15% with standard deviation 10%. The correlation coefficient between the projects is 0.75. Find the expected return, in dollars, of the portfolio of these two projects. What is the probability that this return is less than $4,000?   COMPLETE AND SHOW WORK IN EXCEL

RiverRocks, Inc., is considering a project with the following projected free cash flows: Year 0 Cash Flow - $50.8 (in millions) O A. Cash Flows (millions) - $50.8 The timeline for the project's cash flows is: (Select the best choice below.) Year B. Cash Flows (millions) The firm believes that, given the risk of this project, the WACC method is the appropriate approach to valuing the project. RiverRocks' WACC is 12.8%. Should it take on this project? Why or why not? Year O C. Cash Flows (millions) Year D. Cash Flows (millions) Year 0 - $50.8 0 $50.8 0 $50.8 0 - $10.8 + 1 $10.8 1 - $10.8 1 1 $10.8 $10.8 1 - $20.7 2 $20.7 2 - $20.7 2 2 $20.7 $20.7 2 - $19.5 3 $19.5 + 3 - $19.5 3 $19.5 3 $19.5 3 - $15.4 4 $15.4 4 - $15.4 4 $15.4 4 $15.4 4

FB Company is considering investing in two construction projects, and he developed the following estimates of the cash flows. His required return is 10% and views these projects as equally risky. Year     Project 1 cash flow       project 2 cash flow 0           -550000                        -700000 1           150000                         200000 2           200000                        150000 3           150000                        250000 4            150000                     150000 5            100000                    150000   Required: a)  Calculate the net present value (NPV) of each project, assess its acceptability, and indicate which project is best using NPV. b)  Calculate the profitability index (PI) of each project, assess its acceptability, and indicate which project is best using PI. c)  If both the projects have recorded a positive NPV value and the projects are mutually exclusive, which projects would you recommend for FB Company to undertake? Why?

Connor Corporation is considering two projects (see below). For your analysis, assume these projects are mutually exclusive with a required rate of return of 12%.   project 1 project 2 initial investment $(510,000) $(685,000) cash flow year 1 485,000 610,000 Compute the following for each project:   NPV (net present value) PI (profitability index) IRR (internal rate of return)   Based on your analysis, answer the following questions :   Which is the best choice? Why? Which project should be selected and why? If the projects had the same IRR amounts but different NPV totals, then how would you know which project to select? Explain.

​(​NPV, ​PI, and IRR calculations​) Fijisawa Inc. is considering a major expansion of its product line and has estimated the following free cash flows associated with such an expansion. The initial outlay would be ​$1,850,000​, and the project would generate incremental free cash flows of ​$600,000 per year for 5 years. The appropriate required rate of return is 9 percent.   a. Calculate the NPV. b. Calculate the PI. c. Calculate the IRR. d. Should this project be​ accepted?

You are considering opening a new plant. The plant will cost $95.1 million up front and will take one year to build. After that it is expected to produce profits of $31.8 million at the end of every year of production. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 7.6%. Should you make the investment? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. The NPV of the project will be $ million. (Round to one decimal place.)