Problem 5: Calculating NPV and IRR. A project that provides annual cash flows of $1,710 for 10 years costs $7,560 today. PART 5A: The NPV is $_ if the required rate of return is 10%.
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A: c). PV = 5,000,000; N (number of payments) = 15*12 = 180; rate (monthly rate) = 9%/12 = 0.75%, solve…
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- A project that provides annual cash flows of $22,500 for 7 years costs $84,000 today. a. If the required return is 12 percent, what is the NPV for this project? NPV b. Determine the IRR for this project. IRR2. Calculating Payback An investment project provides cash inflows of $865 per year for eight years. What is the project payback period if the initial cost is $3,100? What if the initial cost is $4,300? What if it is $7,900? 3. Calculating Payback Stenson, Inc., imposes a payback cutoff of three vearsQuestion 3: A project requires an immediate investment of $150,000 and another maintenance expenditure of $30,000every two years starting two years from now. What is the minimum annual income the project should generate starting one year from now for 4 years to satisfy a minimum attractive rate of return (MARR) of 12%? (Provide a cash flow diagram).
- Consider the following: Year Cash Flow 0 -$5,000 1 $200 2 $500 3 4 5 ? $600 $700 The required rate of return is 12%. Find the minimum amount you would have to receive as a cash flow in year 3 and still recommend the project. Answer to 2 decimals places.1. A project that provides annual cash flows of $1,200 for nine years costs $6,000 today. Is this a good project if the required return is 8 percent? What if it's 24 percent? At what discount rate would you be indifferent between accepting the project and rejecting it? The graph displays the project's NPV profile NPV 1 0 -1 0.1 0.2 NPV Profile 0.3 0.4 Interest RateYou are considering a project with an initial outlay of $ 80,000 and expected cash flows of $ 20,000 at the end of of each year for six years. The discount rate for this project is 10%. What is the project's NPV? a. $ 7,105 b. $ 40,105 c. $ 20,105 d. $ 10,105
- A project will generate the following cash flows. If the required rate of return is 15%, what is the project’s net present value? Year Cash flow 0 –$50,000 1 $15,000 2 $16,000 3 $17,000 4 $18,000 5 $19,000 Select one: a. $16,790.47 b. $6,057.47 c. $3,460.47 d. $1,487.21 e. –$3,072.474.2 A project requires an initial cash outlay of $1,000 and a final investment of$600 at the end of year 2, and is expected to generate $1,750 at the end ofthe first year. Calculate the internal rate of return of the project.IRR Refer to problem What is the project’s IRR? " NPV Project L costs $65,000, its expected cash inflows are $12,000 per year for 9 years, andits WACC is 9%. What is the project’s NPV? "
- Cash flows from a new project are expected to be $4,000, $5,000, and $3,000 over the next 3 years, respectively. Assuming an initial cost of $10,000 and a required return of 9%, what is the project's PI? Question 8 options: 0.96 1.04 1.02 0.99 1.06The initial cost of a project is $18 million. If a project returns $3 million at year 1 and that cash flow increases by $2 million each year afterwards, what is the payback period? The initial cost of a project is $18 million. If a project returns $3 million at year 1 and that cash flow increases by $2 million each year afterwards, what is the payback period? 5.77 years 4.25 years 3.33 years 2.66 yearsA investment opportunity requires an investment today of $48.91 and then in five years, will generate a revenue flow of $24 with prob. 0.5 and $84 with prob. 0.5. What is the internal rate of return for this project? 2% 4% 6% 8%