What is the NPV of $50,000 year one, $30,000 year 2 and $80,000
year 3, assuming...
What is the NPV of $50,000 year one, $30,000 year 2 and $80,000
year 3, assuming an initial purchase price of $120,000 and discount
rate of 5.75%?
What is the IRR of $50,000 year one, $30,000 year 2 and $80,000
year 3, assuming...
What is the IRR of $50,000 year one, $30,000 year 2 and $80,000
year 3, assuming an initial purchase price of $120,000 and discount
rate of 5.75%?
3. A project has an initial cost of $30,000 and a 3-year life.
The company uses...
3. A project has an initial cost of $30,000 and a 3-year life.
The company uses straight-line depreciation to a book value of zero
over the life of the project. The projected average net income from
the project is $1,766.67 per year for the next 3 years,
respectively. What is the accounting rate of return based on
average investment?
A. 11.78 percent
B. 14.69 percent
C. 8.72 percent
D. 11.04 percent
4. You are considering two mutually exclusive projects with...
A project has the following expected NCFs: Year 1: $80,000, Year
2: $70,000, Year 3: $60,000,...
A project has the following expected NCFs: Year 1: $80,000, Year
2: $70,000, Year 3: $60,000, Year 4: $50,000. If the NINV is
$150,000 and the WACC is 6%, what is the NPV of the project? a.
$82,659 b. $105,631 c. $93,547 d. $77,753
2. company has been presented with the following investment
opportunity. The initial investment is expected to...
2. company has been presented with the following investment
opportunity. The initial investment is expected to be $380,000. The
operating cash flows are expected to be $120,000 in year 1,
$120,000 in year 2, $120,000 in year 3, $80,000 in year 4, $80,000
in year 5 and $50,000 in year 6. If your cost of capital is 14%,
what is the NPV and IRR for the project? Should they accept?
Given the following information and assuming straight-line
depreciation to zero, what is the NPV for this...
Given the following information and assuming straight-line
depreciation to zero, what is the NPV for this project? Initial
investment in fixed assets = $800,000 initial investment in net
working capital = $200,000 life = 4 years cost savings = $400,000
per year salvage value = $10,000 tax rate = 35% discount rate =
12%
Net Present Value
Calculation
Initial Investment
Discount
Rate
Net Benefit Year 1
Net Benefit
Year 2...
Net Present Value
Calculation
Initial Investment
Discount
Rate
Net Benefit Year 1
Net Benefit
Year 2
New Benefit
Year 3
Present
Value
Is this a worthwhile
investment?
100,000
.06
50,000
50,000
50,000
100,000
.12
50,000
50,000
50,000
100.000
.24
50,000
50,000
50,000
200,000
.06
80,000
80,000
80,000
200,000
.36
100,000
100,000
100,000
500,000
.36
200,000
350,000
500,000
500,000
.36
500,00
350,000
200,000
Net Present Value Problem
Discount rate
12%
Project 1
Year 1
Year 2
Year 3
Year...
Net Present Value Problem
Discount rate
12%
Project 1
Year 1
Year 2
Year 3
Year 4
Year 5
TOTAL
Costs
220,000
35,000
35,000
25,000
20,000
?
Discount factor
?
?
?
?
?
Discounted costs
?
?
?
?
?
?
Benefits
0
80,000
80,000
65,000
60,000
?
Discount factor
?
?
?
?
?
?
Discount benefits
?
?
?
?
?
?
Discounted benefits – Discounted costs (NPV)
?
?
?
?
?
?
ROI =
???...
A property produces a net operating income of $20,000 in year
one ; $30,000 in year...
A property produces a net operating income of $20,000 in year
one ; $30,000 in year two, and $45,000 in years 3 to 6. The
property will be sold in year five. The resale price is estimated
using a terminal capitalization rate of 8.5% applied to the sixth
year NOI. What is the value of the property today using a 10.5%
discount rate?
A. $468,892
B. $502,634
C. $454,872
D. $424,337