Question

Project “Lane” costs $52,125, its expected cash inflows are $11,000 per year for the first four...

Project “Lane” costs $52,125, its expected cash inflows are $11,000 per year for the first four years and $9,000 for the next four years. The project’s WACC is 10%. What is the project’s NPV? What is the project IRR?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer :-

Year Cash Flows PVF@10% PV
0 -52125 1 -52125
1 11000 0.9090909 10000
2 11000 0.8264463 9090.909
3 11000 0.7513148 8264.463
4 11000 0.6830135 7513.148
5 9000 0.6209213 5588.292
6 9000 0.5644739 5080.265
7 9000 0.5131581 4618.423
8 9000 0.4665074 4198.566
NPV 2229.067

Answer (b) IRR = 11.349%

Year Cash Flows PVF@10% PV PVF@15% PV
0 -52125 1 -52125 1 -52125
1 11000 0.909091 10000 0.8695652 9565.217
2 11000 0.826446 9090.909 0.7561437 8317.58
3 11000 0.751315 8264.463 0.6575162 7232.679
4 11000 0.683013 7513.148 0.5717532 6289.286
5 9000 0.620921 5588.292 0.4971767 4474.591
6 9000 0.564474 5080.265 0.4323276 3890.948
7 9000 0.513158 4618.423 0.375937 3383.433
8 9000 0.466507 4198.566 0.3269018 2942.116
NPV 2229.067 -6029.15
IRR 10 + 2229.067/8258.216 * 5 11.349%
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Project L costs $50,060.50, its expected cash inflows are $11,000 per year for 9 years, and...
Project L costs $50,060.50, its expected cash inflows are $11,000 per year for 9 years, and its WACC is 11%. What is the project's IRR? Round your answer to two decimal places.v
Project L costs $47,333.24, its expected cash inflows are $11,000 per year for 9 years, and...
Project L costs $47,333.24, its expected cash inflows are $11,000 per year for 9 years, and its WACC is 13%. What is the project's IRR? Round your answer to two decimal places.
1.Project K costs $57,890.94, its expected cash inflows are $14,000 per year for 8 years, and...
1.Project K costs $57,890.94, its expected cash inflows are $14,000 per year for 8 years, and its WACC is 9%. What is the project's IRR? Round your answer to two decimal places. 2.Project K costs $35,000, its expected cash inflows are $10,000 per year for 8 years, and its WACC is 9%. What is the project's discounted payback? Round your answer to two decimal places. 3.Project K costs $45,000, its expected cash inflows are $11,000 per year for 10 years,...
1. Project L costs $60,000, its expected cash inflows are $14,000 per year for 6 years,...
1. Project L costs $60,000, its expected cash inflows are $14,000 per year for 6 years, and its WACC is 9%. What is the project's payback? Round your answer to two decimal places. 2. Project L costs $40,955.09, its expected cash inflows are $9,000 per year for 10 years, and its WACC is 13%. What is the project's IRR? Round your answer to two decimal places.
1. Project K costs $52,125 at time 0, its expected cash inflows are $12,000 per year...
1. Project K costs $52,125 at time 0, its expected cash inflows are $12,000 per year for 8 years, and its WACC is 12%. What is the project's IRR? A. 15% B. 16% C. 17% D. 18% 2. Patton Corporation has a target capital structure of 60% debt and 40% common equity, with no preferred stock. Its before-tax cost of debt is 12%, and its tax rate is 40%. The stock price is $22.50. The last dividend was $2.00, and...
A project has an initial cost of $52,125, expected net cash inflows of $12,000 per year...
A project has an initial cost of $52,125, expected net cash inflows of $12,000 per year for 8 years, and a cost of capital of 12%. What is the project's NPV? (Hint: Begin by constructing a time line.) , What is the project IRR? What is the project's payback period? What is the project's discounted period?
1. Project K costs $45,000, its expected cash inflows are $15,000 per year for 9 years,...
1. Project K costs $45,000, its expected cash inflows are $15,000 per year for 9 years, and its WACC is 11%. What is the project's NPV? Round your answer to the nearest cent. 2. Project K costs $59,542.90, its expected cash inflows are $12,000 per year for 10 years, and its WACC is 14%. What is the project's IRR? Round your answer to two decimal places. 3. Project K costs $75,000, its expected cash inflows are $15,000 per year for...
a. Project L costs $42,220.68, its expected cash inflows are $9,000 per year for 11 years,...
a. Project L costs $42,220.68, its expected cash inflows are $9,000 per year for 11 years, and its WACC is 12%. What is the project's IRR? Round your answer to two decimal places. b.Project L costs $45,000, its expected cash inflows are $13,000 per year for 8 years, and its WACC is 14%. What is the project's MIRR? Round your answer to two decimal places. Do not round your intermediate calculations. c. Project L costs $70,000, its expected cash inflows...
Project L costs $40,191.97, its expected cash inflows are $9,000 per year for 9 years, and...
Project L costs $40,191.97, its expected cash inflows are $9,000 per year for 9 years, and its WACC is 12%. What is the project's IRR? Round your answer to two decimal places.   %
Project L costs $42,791.88, its expected cash inflows are $9,000 per year for 9 years, and...
Project L costs $42,791.88, its expected cash inflows are $9,000 per year for 9 years, and its WACC is 9%. What is the project's IRR? Round your answer to two decimal places.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT