Suppose your firm is planning to undertake a mining project. After completing the mining activity, it will restore the land. The cash flows are below. What are the IRRs of this investment? Timeline012345CF $ (45.00) $ 45.00 $ 46.00 $ (16.00) $ (16.00) $ (16.00)

This is an unconventional cash flow and hence there might be more than one IRR in this case. To…

Answered: Suppose your firm is planning to…

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

Problem 1PS

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Similar questions

What is the NPV of the estimated cash flows for the following project using a Weighted Average Cost of Capital of 7.0%? Year 0 1 2 3 Cash Flow -140 50 70 90 Group of answer choices 47.54 38.63 59.94 70.00 41.34
Consider the following information: Cash Flows ($) Project C0 C1 C2 C3 C4 A –5,300 1,300 1,300 2,700 0 B –700 0 600 2,300 3,300 C –5,200 3,400 1,700 800 300 a. What is the payback period on each of the above projects? (Round your answers to 2 decimal places.)
A project has the cash flows shown in the following table. If the cost of capital is 9%, what is the NPV of the project? Year 0 1 2 3 4 5 6 Incremental Free Cash Flow -913 281 281 281 281 281 191 Question 5Answer a. $294 b. $272 c. $312 d. $325
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Consider two investments with the fo llowing sequences of cash flows:Net Cush FlowII Project A Project B0 -$30.000 -$15,000I $2,000 $LO,OOO2 $6,000 $10,0003 $12,000 $10,0004 $24 .000 $10,0005 $28,000 $5.000(a) Compute the r:' for each investment.(b) Plot the present-worth curve for each project on the same chart and find the interest rate that makes the two projects equivalent.(c) Tf A and Bare mutually exclusive investment projects, which project is more economically desirable at MARR of 15%?
13. The IBC Company is considering undertaking an investment that promises to have the following cash flows Period 0 is = -$100 Period 1 is= $150 Period 2 is = $50 Period 3 is = $50 If it waits a year, it can invest in an alternative (that is, mutually exclusive) investment that promises to pay Period 1 Period 2 Period 3 −$150 $250 $50 Assume a time value of money of 0.05. Which investment should the firm undertake? Use the present value method and the internal rate of return approaches. With the IRR approach, use the incremental cash flows.
a) Find the relevant cash flows for each of the relevant periods (Time 0 – Time 9). Operating cash flows for Time 1-8 should include: Earnings before taxes Taxes (30%) Net Income Depreciation Free Cash flows b) Calculate the NPV, IRR and Payback Period for the cash flows and indicate whether BGM should pursue the mining project or not.
(Related to Checkpoint 6.6) (Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: Investment Alternatives End of Year 1 2 3 4 5 6 $ 780 A $ 19,000 19,000 19,000 19,000 19,000 B $19,000 19,000 19,000 19,000 19.000 C $19,000 95,000 a. What is the present value of investment A at an annual discount rate of 23 percent? $ 53265.99 (Round to the nearest cent.) b. What is the present value of investment B at an annual discount rate of 23 percent? (Round to the nearest cent.) ..
i need the answer quickly
(Related to Checkpoint 6.6) (Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: End of Year 1 2 3 4 5 6 7 8 9 10 A $10,000 10,000 10,000 10,000 10,000 Investment Alternatives B $10,000 10,000 10,000 10,000 C $10,000 50,000 10,000 10,000 (Click on the icon in order to copy its contents into a spreadsheet.) Assuming an annual discount rate of 23 percent, find the present value of each investment. 10.000
What is the IRR for this project? Year Cash Flow in $ 0 ($1000) 1 400 2 400 3 600

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Suppose your firm is planning to undertake a mining project. After completing the mining activity, it will restore the land. The cash flows are below. What are the IRRs of this investment?

Timeline	0	1	2	3	4	5
CF	$ (45.00)	$ 45.00	$ 46.00	$ (16.00)	$ (16.00)	$ (16.00)

Suppose your firm is planning to undertake a mining project. After completing the mining activity, it will restore the land. The cash flows are below. What are the IRRs of this investment? Timeline 0 1 2 3 4 5 CF $ (45.00) $ 45.00 $ 46.00 $ (16.00) $ (16.00) $ (16.00)