Problem 5: Calculating NPV and IRR. A project that provides annual cash flows of $1,710 for 10 years costs $7,560 today. PART 5A: The NPV is $_ if the required rate of return is 10%.
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A: c). PV = 5,000,000; N (number of payments) = 15*12 = 180; rate (monthly rate) = 9%/12 = 0.75%, solve…
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- 2. Calculating Payback An investment project provides cash inflows of $865 per year for eight years. What is the project payback period if the initial cost is $3,100? What if the initial cost is $4,300? What if it is $7,900? 3. Calculating Payback Stenson, Inc., imposes a payback cutoff of three vearsA project that provides annual cash flows of $22,500 for 7 years costs $84,000 today. a. If the required return is 12 percent, what is the NPV for this project? NPV b. Determine the IRR for this project. IRRConsider the following: Year Cash Flow 0 -$5,000 1 $200 2 $500 3 4 5 ? $600 $700 The required rate of return is 12%. 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.
- Question 3: A project requires an immediate investment of $150,000 and another maintenance expenditure of $30,000every two years starting two years from now. What is the minimum annual income the project should generate starting one year from now for 4 years to satisfy a minimum attractive rate of return (MARR) of 12%? (Provide a cash flow diagram).1. A project that provides annual cash flows of $1,200 for nine years costs $6,000 today. Is this a good project if the required return is 8 percent? What if it's 24 percent? At what discount rate would you be indifferent between accepting the project and rejecting it? The graph displays the project's NPV profile NPV 1 0 -1 0.1 0.2 NPV Profile 0.3 0.4 Interest RateA project will generate the following cash flows. If the required rate of return is 15%, what is the project’s net present value? Year Cash flow 0 –$50,000 1 $15,000 2 $16,000 3 $17,000 4 $18,000 5 $19,000 Select one: a. $16,790.47 b. $6,057.47 c. $3,460.47 d. $1,487.21 e. –$3,072.47
- You are considering a project with an initial outlay of $ 80,000 and expected cash flows of $ 20,000 at the end of of each year for six years. The discount rate for this project is 10%. What is the project's NPV? a. $ 7,105 b. $ 40,105 c. $ 20,105 d. $ 10,1054.2 A project requires an initial cash outlay of $1,000 and a final investment of$600 at the end of year 2, and is expected to generate $1,750 at the end ofthe first year. Calculate the internal rate of return of the project.The initial cost of a project is $18 million. If a project returns $3 million at year 1 and that cash flow increases by $2 million each year afterwards, what is the payback period? The initial cost of a project is $18 million. If a project returns $3 million at year 1 and that cash flow increases by $2 million each year afterwards, what is the payback period? 5.77 years 4.25 years 3.33 years 2.66 years
- IRR Refer to problem What is the project’s IRR? " NPV Project L costs $65,000, its expected cash inflows are $12,000 per year for 9 years, andits WACC is 9%. What is the project’s NPV? "Cash flows from a new project are expected to be $4,000, $5,000, and $3,000 over the next 3 years, respectively. Assuming an initial cost of $10,000 and a required return of 9%, what is the project's PI? Question 8 options: 0.96 1.04 1.02 0.99 1.06A project that provides annual cash flows of $22,500 for 7 years costs $84,000 today. a. If the required return is 12 percent, what is the NPV for this project? b. Determine the IRR for this project.
