Vazeer hydraulics limited is considering an investment proposal involving an outlay of Rs, 45,00,000. The expected cash flows and certainty equivalent coefficients are: The rise-free interest rate is 5 percent. Calculate the net present value of the proposal. Year Expected Cash flow Certainty Equivalent co-efficient 1 Rs 1,000,000 0.90 2 Rs 1,500,000 0.85 3 Rs 2,000,000 0.82 4 Rs 2,500,000 0.78
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- The annual cash flows of a project are shown in the table below: Year t = 0 t = 1 t = 2 Cash Flow -$951 M $2,710 M -$1,887 M The discount rate for the project is 29.0% per annum and spreadsheet analysis has found an internal rate of return of 21.0% per annum. Given this information, should the firm invest in the project?A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows: Year Cash Flow -$ 27,600 11,600 14,600 10,600 1 2 If the required return is 18 percent, what is the IRR for this project? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) IRR % Should the firm accept the project? O No Yes eBook & Resources eBook: 9.5. The Internal Rate of Return Check my work 00A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows: Year Cash Flow O 1 2 3 $28,900 12,900 15,900 11,900 If the required return is 14 percent, what is the IRR for this project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) IRR % Should the firm accept the project? No Yes
- The net cash flow per year for the investment projects A and B, is presented in the table below. Expected Net Cash Flow ($) Project 0 1 2 3 4 A -10,000 6500 3000 3000 1000 B -10,000 3500 3500 3500 3500 Calculate the NPV, IRR, PI, and PVR for the cash flows given in the following table. Assume the minimum acceptable rate of return of 8%. Which projects should be accepted if they are independent projects? Would the selection of the projects change if the cost of capital were 12%?An analyst has the following projected free cash flows for an investment: Year 1: $125,050; Year 2: $137,650; Year 3 to15: $150,000 a year; Year 16 to 20: $200,000 a year. The investment is expected to have a terminal value of $500,000 at the end of Year 20. If the analyst has estimated a present value of $3 millions for the investment, what is the discount rate that she/he has used in calculations. A. % 1.37 B. % 1.78 C. % 2.12 D. % 3.25Johnson Controls has a project with a cost of $7,000 and expected cash flow of stream of $2,000 at the end of year 1, $3,000 at the end of year 2, and $5,000 at the end of year 3. At a discount rate (WACC) of 12.08% what is the net present value (NPV) of this investment?Your answer should be between 7.32 and 16.60, rounded to 2 decimal places, with no special characters.
- Cannonier, Inc., has identified an investment project with the following cash flows: Year Cash Flow 1 $1,050 1,280 3 1,500 4 2,240 What is the future value at a discount rate of 13 percent?Your firm has identified three potential investment projects. The projects and their cash flows are shown here: Project Cash Flow Today (millions) Cash Flow in One Year (millions) A −$13 $23 B $7 $3 C $25 -$15 Suppose all cash flows are certain and the risk-free interest rate is 6%. What is the NPV of each project? (Round to two decimal places.) If the firm can choose only one of these projects, which should it choose based on the NPV decision rule? (Round to two decimal places.) If the firm can choose any two of these projects, which should it choose based on the NPV decision rule? (Round to two decimal places.)Fijisawa, Inc. is considering a major expansion of its product line and has estimated the following cash flows associated with such an expansion. the initial outlay would be $11,700,000, and the project would generate cash flows of $1,200,000 per year for 20 years. the appropriate discount rate is 6.7%. A. Calculate the NPV b. Calculate the PI C. Calculate the IRR D. should this project be accepted? why or why not?
- Kikwetu Limited is considering investing in a project with the following expected cashflows: Year (C.F) 1 35,500 2 39,000 3 25,000 4 15,000 The cost of the project = Sh. 100,000 Required: Compute the approximate profitability index of the project if the discount rate is 10% a. 4.6712 b. 1.9823 c. -1.56 d. 0.9308Christie, Incorporated, has identified an investment project with the following cash flows. Year Cash Flow $ 1,020 1,250 1,470 2,210 1234 a. If the discount rate is 6 percent, what is the future value of these cash flows in Year 4? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the future value at an interest rate of 14 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. What is the future value at an interest rate of 21 percent? c. Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. a. Future value at 6 percent b. Future value at 14 percent c. Future value at 21 percentDundonald Inc. has identified an investment project with the following cash flows. If the discount rate is 8%, what is the future value of these cash flows in year 4? What is the future value at a discount rate of 11%? At 24%? Year Cash Flow 1 $1,375 2 1,495 3 1,580 4 1,630
