The proposed expansion of CIV Electronics' plant facilities requires the immediate outlay of $102,000. Expected net returns are given in the following table. Calculate the internal rate of return (IRR) Year 1 Year 2 Year 3 $Nil $24,000 $30,000 Year 4 Year 5 Year 6 The internal rate of return is%. (Round to the nearest tenth as needed.) $53,000 $48,000 $17,000 ***

The proposed expansion of CIV Electronics' plant facilities requires the immediate outlay of $102,000. Expected net returns are given in the following table. Calculate the internal rate of return (IRR) Year 1 Year 2 Year 3 $Nil $24,000 $30,000 Year 4 Year 5 Year 6 The internal rate of return is%. (Round to the nearest tenth as needed.) $53,000 $48,000 $17,000 ***

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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Compute the payback statistic for Project A if the appropriate cost of capital is 7 percent and the maximum allowable payback period is four years. (Round your answer to 2 decimal places.) Project A Time: 0 1 2 3 4 5 Cash flow: −$1,400 $510 $600 $600 $380 $180 Payback years: _______.__
(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?
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Bha
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