Project A costs $51450, its expected net cash inflows are $11500 per year for 8years, and its WACC is 0.10.What is the project's NPV?(Enter answer to two decimal places. i.e. ten is entered as 10.00)

Net Present Value: It represents the measure of the profitability of a project or investment in…

Answered: What is the project's NPV?

Business

Finance

What is the project's NPV?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 1P: A project has an initial cost of 40,000, expected net cash inflows of 9,000 per year for 7 years,...

See similar textbooks

Related questions

Q: 20.Calculate the present value (principal) and the compound interest (in $). Use Table 11-2. Round y...

A: The present value and interest figure can be calculated as per principle of time value of money

Q: (Bond valuation relationships) A bond of Telink Corporation pays $120 in annual interest, with a $1,...

A: a) Coupon (C) = $120 Par value (P) = $1000 n = 10 years r = 10%

Q: You can buy a carton of three 32-ounce bottles of shower cleaner on sale for $5.00. The 64-ounce "re...

A: Price of a carton of three 32-ounce bottles of shower cleaner = $ 5.00Price of 64-ounce "refill" siz...

Q: If money is worth 5% compounded semi-annually, find the present value of a sequence of 12 semi-annua...

A: Present value of sequence is value today considering the interest rate and the period of annuity and...

Q: David is planning to buy a new car. Since David has not save any money, he plans to take out a loan ...

A: Present Value of Ordinary Annuity refers to a concept that determines the value of cash flows at pre...

Q: You borrow $30,000 for 10 years to pay tuition and fees. The annual interest rate is 12 percent. Wha...

A: Debt financing involves borrowing funds and returning the principal amount in addition with interest...

Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery w...

A: Capital Budgeting: It is the planning process which is undertaken by business to analyse potentia...

Q: The minimum required return by Cross-Ocean’s debtholders. 2. The minimum required return by Cro...

A: Minimum Required Return: It represents the minimum return expected by the investors for investing i...

Q: complete the following using ordinary interest. (use days in a year table.) (don not round intermedi...

A: Principal (P) = $585 Interest rate (r) = 9% Period (d) = 193 days

Q: Question: What type of Annuity is indicated in the problem above?

A: Annuity Due: It represents the annuity where the periodic payments are made at the beginning of eac...

Q: actively targeted at 2.2. The debt beta is estimated to be 0.28 in both old and new leverage levels....

A: A company having both debt and equity in its capital structure is known as a levered company. A leve...

Q: Calculate the cash payback period and net present value of the proposed investment

A: Payback Period: It represents the period in which the project's initial cost is recovered. A projec...

Q: Keisha is taking out an amortized loan for s85,000 to open a small business and is deciding between ...

A: Amortization is an accounting technique accustomed to sporadically lowering the book value of a loan...

Q: Answer the following probiems: 1. The buyer of a car pays P 169,000 cash and P 12,000 every month fo...

A: Solution:- Cash price means the amount payable in today’s terms. So, cash price = Down payment + Pre...

Q: You expect to retire in 25 years. After you retire, you want to be able to withdraw $3000 dollars fr...

A: Present Value: The present value is the value of cash flow stream or the fixed lump sum amount at t...

Q: Twelve months ago, you purchased the shares of a no-load mutual fund for $22.35 per share. The fund ...

A: Given in the question, The purchase price of the share = $22.35 per share Cash dividends = $0.70 C...

Q: A car is available for Rs. 402200 cash or Rs. 150000 cash down payment and 3 equal half yearly insta...

A: Present Value of Ordinary Annuity refers to a concept that determines the value of cash flows at pre...

Q: Bob and Jane are competitors in the grocery store market and each is trying to decide if it is worth...

A: Answer - According to game theory, the dominant strategy in game theory refers to a situation where...

Q: ou have decided to buy a car. The car cost RM 50 Q00e You are taking a loan from a ban vith the inte...

A: Loans are paid by the monthly payments that carry the payment for interest and payment for the princ...

Q: If the sum of P12,000.00 is deposited in an account earning interest rate of 9% compounded quarterly...

A: Future Value: The future value is the amount that will be received at the end of a certain period. T...

Q: How do gross profits, operating income, and net income differ

A: In finance when making or analyzing an income statement we look into different types of income or pr...

Q: Calculate the value of the bonds and determine whether the bond is selling at discount, premium or p...

A: Given The face value of bonds is RM1000 Rate is 12%

Q: Rosaline bought 9 tickets to an international product exposition for P2,025.00. How many tickets can...

A: Total cost of 9 tickets P2,025.00 Cost of 1 ticket (P2,025.00 / 9) P225.00 Total amount sp...

Q: Rank the following three stocks by their level of total risk, highest to lowest. Rail Haul has an av...

A: Risk can be compared on the basis of coefficient of variation. Higher the coefficient of variation, ...

Q: What is the net present value of the cost of treatment A. Treatment A costs $1000 now, $1000 after o...

A: The discounted value of future cash flows is known as the present value. It can be either be calcula...

Q: 3. Rey borrowed P 40,000 at 12 % compounded semiannually. He agreed to pay the lender semiannually a...

A: Given that equal amount shall be paid till the end of 8th year and 6000 shall be paid at the end of ...

Q: •Assume that you have saved money for a down payment on your dream house, but you still need to borr...

A: a) Given that: Loan Amount=Php500000= PV of annuity Year of mortgage=5 Year= 60 months Annual Rate (...

Q: A sum of Rs 390200 is to be paid back stalments. How much is each instalment arged is 4% per annum c...

A: The loans are paid by equal annual installments that carry the payment of interest and the payment o...

Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery w...

A: Cashflows means movement of cash it may be inflow or outflow. For the purposes of capital decision,...

Q: . What is the present worth of 4100 deposited at the end of every three months for 5years if the int...

A: The future value is the amount deposited and interest accumulated over the period of time. The prese...

Q: Having achieved immense success since graduating from university, you have set up an endowment fund ...

A: First annual contribution (X) = $100000 Constant rate of growth (d) = - 2% (Declining rate) Interest...

Q: Leila takes out a loan for her college tuition from a bank that charges simple interest at an annual...

A: We need to use simple interest formula to calculate interest amount of loan. The formula is Simple i...

Q: Calculate the Black-Scholes price of a Call option where: S = $50 K = $45 %3D T-t=.25 O = .20 r = .0...

A: Stock Price S $ 50.00 Strike Price K $ 4...

Q: Mr. Velasquez invests P 2,500 at the end of each 6 months to a fun Paying 8 % % compounded semiannua...

A: Semiannual deposit (S) = P 2500 r = 8.75% per annum = 4.375% semiannually

Q: Find the present value of the given future amount.

A: Present Value: It represents the present value of the future sum of the amount. It is computed by d...

Q: If the first increment (B-A) AROR is 6.3%, and 2hd increment (C-B) AROR is 3.1%. The best alternativ...

A: Incremental rate of return Analysis It is the analysis of financial return to investor where ther...

Q: G-Mart operates a very successful chain of hardware shop in Malaysia. The company needs to raise fun...

A: Cost of capital is the weighted average cost of capital of the company which can be calculated by mu...

Q: Your parents have discovered a $1,000 bond at the bottom of their safe-deposit box. The bond was giv...

A: Bond is the debt security that investors uses to reduce the risk and increase stable return from the...

Q: 1. Elimann Systems is considering a project that has the following cash flow and cost of capital (r)...

A: Cost of capital = 9.00% Year Cash flow 0 -1000 1 500 2 500 3 500

Q: Identify methods for using and analysing working capital cycles ( max. 300 words

A: Step 1 It takes time for the Working Capital Cycle (WCC) to turn all current assets (such as shares ...

Q: pare general journal entries for the following: Feb 1, 2024 - Purchased and retired 400 common share...

A: Basic Journal entry is the part of business finance.

Q: 22.Calculate the present value (principal) and the compound interest (in $). Use Table 11-2. Round y...

A: Compound amount (FV) = $26,500 Period = 18 Months Semi annual period (n) = 18/6 = 3 Interest rate = ...

Q: Risk-weighted assets increase Risk-weighted assets decrease

A: Step 1 Risk assets are calculated by adding the amount of risk to the appropriate risk weight of the...

Q: January February March 15,000 Sales in units.. 20,000 18,000 Production in units.. 18,000 19,000 16,...

A: This pertains to production budget in finance. We often make different types of budget in finance an...

Q: Phoebe needs $6000 one year from now to finance the recording of her acoustic music album. Phoebe ha...

A: Here, To Find: Monthly deposit at 1.25% interest compounded monthly =? Rate of return =?

Q: You created and sold a futures contract 25 days ago. The contract at that time had a price of $60 an...

A: The rate of return of an investment with zero risk is known as the risk-free rate of return. It can ...

Q: Warren Buffett: How Most People Should Invest in 2021 explain the statement given

A: The statement was issued by Buffet in 2021 Berkshire Hathaway annual meeting. In the annual meeting ...

Q: What is the importance of recording business transaction?

A: Business Transactions are the transactions carried out in the business in the financial year. It inc...

Q: 4. Compare the alternatives shown below on the basis of a present worth analysis, using an interest ...

A: Present worth is calculated by dividing the net of future cash outflows and inflows by the 1+r facto...

Q: your required return is 7.32% how would adding ETFS with average annual returns that are expected to...

A: Meaning of ETFs( Exchange traded funds) This is a bunch of securities which is responsible for the ...

Concept explainers

Healthcare Organization

Healthcare organizations are entities that provide healthcare services such as primary care, surgery, diagnosis of diseases, and medical treatment to patients who are in need. Healthcare organizations or health systems provide healthcare benefits to people through clinics, hospitals, teaching and training institutions, and research institutions. The fundamental purpose of healthcare organizations is to offer healthcare services at a lower cost to meet the health needs of the people.

Question

Project A costs $51450, its expected net cash inflows are $11500 per year for 8
years, and its WACC is 0.10.
What is the project's NPV?
(Enter answer to two decimal places. i.e. ten is entered as 10.00)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step by step

Solved in 4 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Project X costs $10,000 and will generate annual net cash inflows of $4,800 for five years. What is the NPV using 8% as the discount rate?
Project L costs $45,041.68, its expected cash inflows are $10,000 per year for 9 years, and its WACC is 12%. What is the project's IRR? Round your answer to two decimal places
A project costs $2,620 up front (year 0), and its net cash flows are expected to be +$856 per year for 8 years (with the first cash flow occurring one year from today). If the WACC is 12%, the project's NPV is $_________. Do not round any intermediate work. Round your *final* answer to 2 decimal places (example: 12.34567 = 12.35). Do not enter the $ sign. Include a negative sign if your answer is negative.
Project A requires an initial outlay at t=0 of $1,000, and its cash flows are the same in Years 1 through 10. Its IRR is 17%, and its WACC is 10%. What is the project's MIRR? Do not round intermediate calculations. Round your answer to two decimal places. %
A project requires an initial outlay at t = 0 of $4,000, and its cash flows are the same in Years 1 through 10. Its IRR is 18%, and its WACC is 9%. What is the project's MIRR? Round your answer to two decimal places.
You are assigned to calculate IRR for Sur Project with life of 8 years. You know that for the Sur project NPV @11% is OMR 25816 (positive) while NPV @ 12% is –OMR 5788(negative). The initial investment for this project is OMR 85000.The cost of capital for this project is 11%. What is the IRR (rounded to two decimal places) for the Sur Project? A. 11.82% B. 12.29% C. 12.82% D. 10.18%
Project A costs $5,000, and its cash flows are the same in Years 1 through 10. Its IRR is 12%, and its WACC is 8%. What is the project's MIRR? Do not round intermediate calculations. Round your answer to two decimal places.
еВook Project A costs $4,000, and its cash flows are the same in Years 1 through 10. Its IRR is 14%, and its WACC is 10%. What is the project's MIRR? Do not round intermediate calculations. Round your answer to two decimal places.
A project costs $264.91 and subsequent cash flows for dates 1 through 3 are $36.60 , $56.88 , and $51.91 , respectively. If there is only one more cash flow at date 4 , and the project's internal rate of return is 7.75% , what is the amount of the date 4 cash flow? Round your final answer to 2 decimal places and leave out the "$" sign.
Project L requires an initial outlay at t = 0 of $52,799, its expected cash inflows are $9,000 per year for 10 years, and its WACC is 14%. What is the project's IRR? Round your answer to two decimal places. _____________ %
A project has an initial cost of $7,000. The cash inflows are $1,000, $2,600, $3,000, and $4,000 over the next four years, respectively. What is the payback period? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
1. The initial investment is $52,133 and the salvage value is $10,000. The project is expected to generate $25,087 net cash inflows and the annual net income is $5,072. State the annual rate of return in decimal form to two decimal places. (For example, if you calculate 16%, then state your answer as .16)