Question

NPV

Your division is considering two investment projects, each of which requires an up-front expenditure of $23 million. You estimate that the investments will produce the following net cash flows:

Year |
Project A |
Project B |

1 | $ 5,000,000 | $20,000,000 |

2 | 10,000,000 | 10,000,000 |

3 | 20,000,000 | 8,000,000 |

What are the two projects' net present values, assuming the cost of capital is 5%? Round your answers to the nearest dollar.

Project A $ 8,107,500

Project B $ 12,026,400

What are the two projects' net present values, assuming the cost of capital is 10%? Round your answers to the nearest dollar.

Project A $ 4,835,000

Project B $ 9,454,400

What are the two projects' net present values, assuming the cost of capital is 15%? Round your answers to the nearest dollar.

Project A $ 2,058,500

Project B $ 7,211,000

What are the two projects' IRRs at these same costs of capital? Round your answers to two decimal places. Project A %

Project B %

Answer #1

NPV
Your division is considering two investment projects, each of
which requires an up-front expenditure of $17 million. You estimate
that the investments will produce the following net cash flows:
Year
Project A
Project B
1
$ 4,000,000
$20,000,000
2
10,000,000
10,000,000
3
20,000,000
6,000,000
What are the two projects' net present values, assuming the cost
of capital is 5%? Do not round intermediate calculations. Round
your answers to the nearest dollar.
Project A: $
Project B: $
What are the...

Your division is considering two investment projects, each of
which requires an up-front expenditure of $17 million. You estimate
that the investments will produce the following net cash flows:
Year
Project A
Project B
1
$ 5,000,000
$20,000,000
2
10,000,000
10,000,000
3
20,000,000
6,000,000
What are the two projects' net present values, assuming the cost
of capital is 5%? Do not round intermediate calculations. Round
your answers to the nearest dollar.
Project A: $
Project B: $
What are the two...

Your division is considering two investment projects, each of
which requires an up-front expenditure of $17 million. You estimate
that the investments will produce the following net cash flows:
Year
Project A
Project B
1
$ 5,000,000
$20,000,000
2
10,000,000
10,000,000
3
20,000,000
6,000,000
What are the two projects' net present values, assuming the cost
of capital is 5%? Do not round intermediate calculations. Round
your answers to the nearest dollar.
Project A: $
Project B: $
What are the two...

Your division is considering two investment projects, each of
which requires an up-front expenditure of $15 million. You estimate
that the investments will produce the following net cash flows:
Year
Project A
Project B
1
$ 5,000,000
$20,000,000
2
10,000,000
10,000,000
3
20,000,000
6,000,000
What are the two projects' net present values, assuming the cost
of capital is 5%? Do not round intermediate calculations. Round
your answers to the nearest dollar.
Project A: $
Project B: $
What are the two...

Your division is considering two investment projects, each of
which requires an up-front expenditure of $15 million. You estimate
that the investments will produce the following net cash flows:
Year
Project A
Project B
1
$ 6,000,000
$20,000,000
2
10,000,000
10,000,000
3
20,000,000
6,000,000
What are the two projects' net present values, assuming the cost
of capital is 5%? Do not round intermediate calculations. Round
your answers to the nearest dollar.
Project A: $
Project B: $
What are the two...

Your division is considering two investment projects, each of
which requires an up-front expenditure of $15 million. You estimate
that the investments will produce the following net cash flows:
Year
Project A
Project B
1
$ 5,000,000
$20,000,000
2
10,000,000
10,000,000
3
20,000,000
6,000,000
What are the two projects' NPVs, assuming the cost of capital is
5%?
Project A: $
Project B: $
What are the two projects' NPVs, assuming the cost of capital is
10%?
Project A: $
Project...

7. Your division is considering two investment
projects, each of which requires an up-front expenditure of $17
million. You estimate that the investments will produce the
following net cash flows:
Year
Project A
Project B
1
$ 4,000,000
$20,000,000
2
10,000,000
10,000,000
3
20,000,000
6,000,000
What are the two projects' net present values, assuming the
cost of capital is 5%? Do not round intermediate calculations.
Round your answers to the nearest dollar.
Project A: $__
Project B: $__
What are...

Problem 10-3
MIRR
A project has an initial cost of $42,875, expected net cash
inflows of $12,000 per year for 9 years, and a cost of capital of
12%. What is the project's MIRR? Round your answer to two decimal
places.
Problem 10-7
NPV
Your division is considering two investment projects, each of
which requires an up-front expenditure of $17 million. You estimate
that the investments will produce the following net cash flows:
Year
Project A
Project B
1
$ 5,000,000...

Your division is considering two investment projects, each of
which requires an up-front expenditure of $22 million. You estimate
that the cost of capital is 11% and that the investments will
produce the following after-tax cash flows (in millions of
dollars):
Year
Project A
Project B
1
5
20
2
10
10
3
15
8
4
20
6
If the two projects are mutually exclusive and the cost of
capital is 15%, which project should the firm undertake?
The firm...

Your division is considering two investment projects, each of
which requires an up-front expenditure of $27 million. You estimate
that the cost of capital is 10% and that the investments will
produce the following after-tax cash flows (in millions of
dollars):
Year
Project A
Project B
1
5
20
2
10
10
3
15
8
4
20
6
What is the regular payback period for each of the projects?
Round your answers to two decimal places.
Project A: years
Project B: years...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 1 minute ago

asked 3 minutes ago

asked 19 minutes ago

asked 31 minutes ago

asked 42 minutes ago

asked 43 minutes ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 3 hours ago

asked 3 hours ago