You are evaluating a real estate development project that requires an initial investment of $ 4,000,000. The project is expected to generate a net operating income of $550,000 per year with annual increases of 2% for the next 5 years. After 5 years, you expect to sell the developed property for $4,200,000. If your required rate of return is 14 %, what is the present value or investment value of the cash flows from the project? $4,136, 484 $3,768,350 $4,073,281 $ 4,225595

Grayson Company is considering a purchase of equipment that costs $62,000 and is expected to offer annual cash inflows of $17,000. Grayson’s minimum required rate of return is 10%. How many years must the cash flows last for the investment to be acceptable ?

Consider a project with an initial investment (today, t = 0) of $225,000. This project will generate cash flows of $68,750 per year for the next 6 years. The company will pay $50,000 to another for clean-up and disposal in Year 6. What is the Profitability Index (PI) of the project if shareholders demand 8.25% return? Answer in whole numbers, rounded to three decimal places.

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Let's say you have the opportunity to invest in a project that will require you to invest $133,292.00 today.  You will receive positive after tax cash flows of $37,000 at the end of each of the next six years.  At the end of that sixth year, you will also receive a terminal value payment of $22,000 after tax.  Your cost of capital is 11.0%.  What is the NPV of the project?   Round to the nearest $ and use the $ symbol..and use a comma in your number if applicable.  No decimals.

Ted is considering a project that will produce cash inflows of $2,900 per year for 3 years. The required rate of return is 15.5 percent, and the initial cost is $6,700. What is the discounted payback period?

Use the NPV method to determine whether Kyler Products should invest in the following projects: Project A: Costs $280,000 and offers seven annual net cash inflows of $52,000. Kyler Products requires an annual return of 12% on investments of this nature. Project B: Costs $385,000 and offers 9 annual net cash inflows of $75,000. Kyler Products demands an annual return of 10% on investments of this nature. (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Read the requirements. Requirement 1. What is the NPV of each project? Assume neither project has a residual value. Round to two decimal places. (Enter any factor amounts to three decimal places, X.XXX. Use parentheses or a minus sign for a negative net present value.) Caclulate the NPV (net present value) of each project. Begin by calculating the NPV of Project A. Project A: Years 1-7 0 Present value of annuity Investment Net present value of Project A Calculate…

You have an opportunity to purchase a piece of vacant land for $30,000 cash. If you plan to hold it for 15 years and then sell it at a profit. During this period, you would have to pay annual property taxes of $600 and have no income from the property. Assuming that you would want a 10% rate of return from the investment, a) Draw a cashflow diagram. b) What net price would you have to sell it in the next 15 years?

You are considering opening a new plant. The plant will cost $103.4 million up front and will take one year to build. After that it is expected to produce profits of $29.6 million at the end of every year of production (starting two years from now). The cash flows are expected to last forever Calculate the NPV of this investment opportunity if your cost of capital is 8.3%. Should you make the investment? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. D

Capstone Investments is considering a project that will produce cash inflows of $11,000 in 1 year, $22,000 in 2 years, and $33,000 in 3 years. The company assigns the project a discount rate of 6%?  What is the present value of these cash inflows?