Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- Give typing answer with explanation and conclusionarrow_forwardCompute the IRR statistic for Project E. The appropriate cost of capital is 8 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project E Time: 0 1 2 3 4 5 Cash flow −$1,900 $710 $750 $700 $480 $280 Should the project be accepted or rejected?multiple choice accepted rejectedarrow_forwardWhat is the MIRR of Project PayoffSoon at a WACC of 11.786%? What is the PI of Project PayoffSoon at a WACC of 11.888%?arrow_forward
- Compute the NPV for Project M if the appropriate cost of capital is 9 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) Project M Time: 0 1 2 3 4 5 Cash flow: −$3,500 $750 $880 $920 $1,000 $500 Should the project be accepted or rejected?multiple choice rejected acceptedarrow_forwardCheck my wor Compute the NPV for Project X and accept or reject the project with the cash flows shown below if the appropriate cost of capital is 8 percent. Time: 1 4 Cash flow: -110 -110 170 145 120 Multiple Choice $103.10 $323.20 $111.35 $111.90 80 888 DIIarrow_forward4. NPV versus IRR Bruin, Inc., has identified the following two mutually exclusive projects: Year 0 1 2 3 4 Cash Flow(A) -$ 40,000 19,100 17,800 15,200 8,400 Cash Flow(B) -$ 40,000 6,300 14,200 17,900 30,300 a. What is the IRR for each of these projects? (5%) Using the IRR decision rule, which project should the company accept? (5%) b. If the required return is 10 percent, what is the NPV for each of these projects? (5%) Which project will the company choose if it applies the NPV decision rule? (5%)arrow_forward
- Compute the IRR statistic for Project E. The appropriate cost of capital is 7 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project E Time: 0 1 2 3 4 5 Cash flow −$3,600 $1,110 $1,050 $900 $680 $480 Should the project be accepted or rejected?multiple choice rejected acceptedarrow_forwardCompute the PI statistic for Project Q if the appropriate cost of capital is 12 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project Q Time: 0 1 2 3 4 Cash flow: –$12,200 $3,950 $4,780 $2,120 $2,750 Should the project be accepted or rejected? multiple choice accepted rejectedarrow_forward10 You are trying to determine which of two none mutually exclusive projects to undertake. Project Adam has an initial outlay of $10,000, an NPV of $4,392.15, an IRR of 11.33%, and an EAA of $1,158.64. Project Eve has an initial outlay of $15,000, an NPV of $5,833.73, an IRR of 9.88%, and an EAA of $1,093.50. The cost of capital for both projects is 10%, and the projects have different lives. If the projects are not repeatable, then: You should do both projects because they have positive NPVs. You should do Project Adam because it has a higher EAA. You should do Project Eve because it has a higher NPV. You should do Project Adam because it has a higher IRR. You should do neither projects since neither of them adds value to you.arrow_forward
- Compute the PI statistic for Project Z if the appropriate cost of capital is 6 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project Z Time: 0 1 2 3 4 5 Cash flow: −$1,200 $390 $520 $690 $340 $140 Should the project be accepted or rejected?multiple choice rejected acceptedarrow_forwardCompute the IRR statistic for Project E. The appropriate cost of capital is 8 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project E Time: 0 1 2 3 4 5 Cash flow -$1,900 $710 $750 $700 $480 $280 IRR % 90 Should the project be accepted or rejected? O accepted O rejectedarrow_forwardCompute the NPV for Project M if the appropriate cost of capital is 7 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) Project M Time: Cash flow: 2 4 -$1,100 $370 $500 $540 $620 $120 NPV Should the project be accepted or rejected? O accepted O rejected MacBook Alrarrow_forward
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