Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- Please send me the solution correct and if possible without excelarrow_forwardThere are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $34,927 and is expected to generate the following cash flows: First Year Second Year Third Year Total Alpha Project $32,500 $22,500 $4,500 $59,500 Beta Project 7,000 23,500 27,904 58,404 A. Calculate the internal rate of return on both projects. Use the IRR spreadsheet function to calculate internal rate of return. Alpha Project fill in the blank % Beta Project fill in the blank % B. Make a recommendation on which one to accept.arrow_forward(Paybackperiod, NPV, PI, and IRR calculations) You are considering a project with an initial cash outlay of $80,000 and expected free cash flows of $26,000 at the end of each year for 6 years. The required rate of return for this project is 7 percent. a. What is the project's payback period? b. What is the project's NPV? c. What is the project's PI? d. What is the project's IRR?arrow_forward
- The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each Project has an initial after-tax cash outflow of $6,500 and has an expected life of 3 years. Annual project after-tax cash flows begin 1 year after the initial investment and are- Subject to the following probability distributions. Project A Project B Probability Cash Flows 0:2 27 Probability 0.2 VOU J Cash Flows TO $6,250 0.6 6,300 0.6. 19,000 0.2. 6,750 0.2 BPC has decided to evaluate the riskier project at 12%. and the less-risky project at 8% a) What is each project's expected annual after tax- Cush flow? Round your answers to the nearest cent. Project A: $ 200 BOLL Project B: I 5/07 Project B's standard deviation (013) is $6,185 and its coefficient of variation (CVB) is 0.80, What are the values of OA and CVA? Do not rand) intermediate calculations. Rand your answer for Standard deviation to the nearest cent and for coefficient of variation to two decimal places. σε: J CVA 6,500arrow_forwardA firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: Year Cash Flow 0. -$ 41,000 20,000 23,000 14,000 1 3. What is the NPV of the project if the required return is 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g.., 32.16.) NPV At a required return of 11 percent, should the firm accept this project? No O Yes What is the NPV of the project if the required return is 24 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)arrow_forwardPOD has a project with the following cash flows: Year Cash Flows 0 -$ 281,000 145,500 123 163,000 128,100 The required return is 8.3 percent. What is the profitability index for this project?arrow_forward
- (Related to Checkpoint 11.4) (IRR calculation) Determine the internal rate of return on the following project: An initial outlay of $9,500 resulting in a cash inflow of $1,600 at the end of year 1, $4,700 at the end of year 2, and $7,800 at the end of year 3. This project's internal rate of return is %. (Round to two decimal places.)arrow_forwardPlease answer fast I will rate for you sure....arrow_forwardWhen inputting an answer, round your answer to the nearest 2 decimal places. If you need to use a calculated number for further calculations, DO NOT round until after all calculations have been completed. For the final answer, Round to 2 decimal places. A firm has a WACC of 8.35% and is deciding between two mutually exclusive projects. Project A has an initial investment of $63.06. The additional cash flows for project A are: year 1 = $17.78, year 2 = $38.17, year 3 = $46.29. Project B has an initial investment of $72.12. The cash flows for project B are: year 1 = $52.25, year 2 = $37.11, year 3 = $33.12. Calculate the Following: Payback Period for Project A: Payback Period for Project B: NPV for Project A: NPV for Project B: If can't solve all pls skip it i dont need your answer then i wil definitely like for complete answer and skip if you can't.arrow_forward
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