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- Redbird Company is considering a project with an initial investment of $265,000 in new equipment that will yield annual net cash flows of $45,800 each year over its seven-year life. The companys minimum required rate of return is 8%. What is the internal rate of return? Should Redbird accept the project based on IRR?What is the approximate maximum amount that a firm should consider paying for a project that will return $15,000 annually for 5 years if the opportunity cost is 10%? Select one: a.$33,520 b $56,860 c. $62,540 d. $75,000A firm is considering a six-year project with a payback period of 3.5 years. It has cash flows the first three years of $2,000 per year, and cash flows of $1,000 during its last three years. What is the NPV of this project in a 10% "world?" [using a 10% distount rate!] O $2,500 O $881 O $1,097 O $342 O $687
- You are considering the following two mutually exclusive projects. The required rate of return is 11.25% for project A and 10.75% for project B. Which project should you accept? YEAR PROJECT A PROJECT B 0 -$48,000 -$126,900 1 $18,400 $69.700 2 $31,300 $80,900 3 $11,700 $0An investment project costs X. It is expected to have an annual net cash flow of 0.125X for 20 years. What is the project's payback period? Select one: 6 а. 4 years b. 2 years c. 8 years d. 6 yearsSuppose a firm will invest $500 today, $600 a year from now, $700 two years from now, $800 three years from now, and $900 four years from now. What will the future value of the project five years from now assuming the interest rate of 12%? O $3,939.08 $4,303.79 $5,398.68 $4,820.25
- Consider the two mutually exclusive projects that follow. EOY 0 1 2 3 Project A -10000 5125 5125 5125 4450 Project B -8500 4450 4450 The firm's MARR is 10% per year Select the CORRECT statement: O a. The PW of project A is equal to that of project B O b. The PW of project A is smaller than that of project B O c. The IRR of project B is larger than that of project A O d. The IRR of project A is larger than that of project BIf you invest $73,300 in a project which yields an annual return of $13,500, how many years will it take to recover your investment if the annual interest rate is 4.5%? a 7 b 9 c. 5 d 8 e. 6year payback period criteria and a required return of 12 percent. |Year Cash flow |(OMR) -26,000 18,000 10,000 7,000 -15,000 9,000 2 3 4 11. What is the net present value for the project? 12. What is the payback period for the project? 13. What is the discounted payback period for the project? 14. What is the profitability index for the project? 15. Given your analysis, should the fim accept or reject the projeet?
- A project has an initial cost of $60,000, expected net cash inflows of $13,000 per year for 7 years, and a cost of capital of 10%. What is the project’s NPV? Blank 1 What is the project’s IRR? Blank 2 What is the project’s MIRR? Blank 3 What is the project’s payback period? Blank 4 What is the project’s discounted payback period? Blank 511. Thomson Electric Systems is considering a project that has the following cash flow and WACC data. What is the project's MIRR? WACC = 8% Year: Cash flows: 0 -$700 12. What is the project's IRR rate? $500 13. What is the project's payback period? 2 $200 14. What is the project's discounted payback period? 3 $400If you invest $10,000 now into a project that will yield net revenues of $1327 at the end of each year for 12 years, what is the internal rate of return (IRR) of your investment? O a 18% Оь. 10% Ос. 16% Od. 8% O e. 15%
