Use an 8-year analysis period and a 10% interest rate to determine which of the alternatives below should be selected. What is the NPV of both alternatives and which should be selected.

A project has a beta of 1.25, the risk-free rate is 5.0%, and the market rate of return is 9.2%. What is the project's expected rate of return?

A project under consideration has an internal rate of return of 16% and a beta of 0.9. The risk free rate is 6% and the expected rate of return on the market portfolio is 16%. A. What is the required rate of return? B. Should the project be accepted? C. What is the required rate of return on the project if it's beta is 1.90? D. If the projects beta is 1.90 should the project be accepted?

Compare alternatives A and B with the present worth method if the MARR is 14% per year. Which one would you recommend? Assume repeatability and a study period of 16 years. Capital Investment Operating Costs The PW of Alternative A is $ - 108236. (Round to the nearest dollar.) The PW of Alternative B is $ -95429. (Round to the nearest dollar.) Alternative B should be selected. A $55,000 $6,000 at end of year 1 and increasing by $600 per year thereafter $6,000 every 4 years 16 years $12,000 if just overhauled Overhaul Costs Life Salvage Value Click the icon to view the interest and annuity table for discrete compounding when the MARR is 14% per year. B $15,000 $12,000 at end of year 1 and increasing by $1,200 per year thereafter None 8 years negligible D

A project under consideration has an internal rate of return of 17% and a beta of 0.5. The risk-free rate is 9% and the expected rate of return on the market portfolio is 17%. A. What is the required rate of return on the project? B. Should the project be accepted? C. What is the required rate of return on the project if the beta is 1.50? D. If projects beta is 1.50, should the project be accepted?

Use these data to compute for each (a) the NPV at discount rates of 10 and 5 percent, (b) the BCR at the same rates, and (c) the internal rate of return for each. Describe the facts about the projects that would dictate which criterion is appropriate, and indicate which project is preferable under each circumstance.

A project under consideration has an internal rate of return of 18% and a beta of 0.5. The risk-free rate is 6%, and the expected rate of return on the market portfolio is 18%. a. What is the required rate of return on the project? (Do not round intermediate calculations. Enter your answer as a whole percent.) b. Should the project be accepted? c. What is the required rate of return on the project if its beta is 1.50? (Do not round intermediate calculations. Enter your answer as a whole percent.) d. If project's beta is 1.50, should the project be accepted?

Net Present Value-Unequal Lives Project 1 requires an original investment of $65,200. The project will yield cash flows of $14,000 per year for 5 years. Project 2 has a computed net present value of $15,700 over a three-year life. Project 1 could be sold at the end of three years for a price of $65,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Present Value of $1 at Compound Interest 10% 0.909 0.826 0.751 0.683 Year 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 6% 10 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 2.673 3.465 4.212 4.917 5.582 6.210 0.621 0.564 0.513 0.467 0.424 0.386 Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 0.943 0.870 1.833 1.626 2.283 2.855 6.802 7.360 0.909 1.736 2.487 3.170 3.791 4.355 4.868 12% 5.335 5.759 6.145 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.893 1.690 2.402 3.037 3.605 4.111 4.564 4.968 15% 5.328…

The terminal cap rate used for valuation purposes in a DCF is fundamentally different than the discount rate used in that same DCF. The assumed sale of the property takes place at the end of your hold period, generally 10 years later in most models. The property is older and the market and the economy have changed. With that said, what do you believe to be the right approach for terminal cap rate selection in a DCF on a development project and why?

Project Analysis. Assume that you are evaluating the following three mutually exclusive projects: A. Complete the following analyses. (For the last two lines, Terminal Value, please write in the dollar amount of the terminal value.) B. Compare and explain the conflicting rankings of the NPVs and TRRs versus the IRRs. C. Using different discount rates, is it possible to get different rankings within the NPV calculation? Why or why not? D. If 10 percent is the required return, which project is preferred? E. Which is the fairer representation of these two projects, TRR or IRR? Why?