Question

Assume a project will cost $10,000. Expected Cash Flows to be received are $2,000 per year at end of years 1 & 2, then $4,000 per year at end of years 3 & 4 and $5,000 at the end of year 5. No cash flows beyond year 5. Discount rate is 10%.

What is the NPV (value created)?

Answer #1

Two projects have the same initial cost. Project A has estimated
cash flows of $1,000, $2,000, $3,000, $4,000 at the end of years 1
to 4 respectively. Project B has estimated cash flows of $4,000,
$3,000, $2,000, $1,000 at the end of years 1 to 4 respectively.
Which project will have the greater NPV assuming a positive
discount rate? Select one: a. The NPV will be the same for both
Project A and Project B b. Project B c. Project...

Project P costs $15,000 and is expected to produce benefits
(cash flows) of $4,500 per year for five years. Project Q costs
$37,500 and is expected to produce cash flows of $11,100 per year
for five years. Calculate each project’s (a) net present value
(NPV), (b) internal rate of return (IRR), and (c) mod- ified
internal rate of return (MIRR). The firm’s required rate of return
is 14 percent. Compute the (a) NPV, (b) IRR, (c) MIRR,
and (d) discounted payback...

A project generates a cash flow of $497,400.00 per year (end of
year cash flows). If the project can last 15.00 more years, what is
its value TODAY of the remaining cash flows if the cost of capital
is 8.00%?
A real estate investment has the following expected cash
flows:
Year
Cash Flows
1
$13,600.00
2
$27,200.00
3
$44,000.00
4
$42,700.00
The discount rate is 10.00 percent. What is the investment's
future value at the end of the fourth year?

Assume the following cash flows for Project A: Year 0
=$(10,000); Year 1 = $4,000; Year 2 = $3,500; Year 3 = $1,500; Year
4 = $3,000; and Year 5 = $1,500. The company’s hurdle rate is
9.00%. For Project A, please calculate: 1) the discounted payback
period; 2) the net present value; 3) the internal rate of return;
and 4) the modified internal rate of return.

Project S has a cost of $10,000 and is expected to produce
benefits (cash flows) of $3,000 per year for 5 years. Project L
costs $25,000 and is expected to produce cash flows of $7,400 per
year for 5 years. Calculate the two projects' NPVs (in dollars),
assuming the cost of capital of 10%. (Round your answers to the
nearest cent.)
S$
L$
Calculate the two projects' IRRs (as percents), assuming the
cost of capital of 10%. (Round your answers...

13) Assume the following cash flows for Project A: Year 0
=$(10,000); Year 1 = $4,000; Year 2 = $3,500; Year 3 = $1,500; Year
4 = $3,000; and Year 5 = $1,500. The company’s hurdle rate is
9.00%. For Project A, please calculate: 1) the discounted payback
period; 2) the net present value; 3) the internal rate of return;
and 4) the modified internal rate of return. (3 points)

. Calculate the IRR and NPV for the following cash flows. Assume
a 15% discount rate
Year
Project 1
Cash flow
Project 2
Cash flow
0
-$20,000
-$20,000
1
1,000
12,000
2
3,000
15,000
3
4,000
3,000
4
12,000
4,000
5
15,000
1,000
9. If your tenant pays you rent of $24,000 a year for 10 years,
what is the present value of the series of payments discounted at
10% annually?
10. You are going to invest $300,000 in a...

A project costs $12,800 and is expected to provide a real cash
inflow of $10,000 at the end of each of years 1 through 5.
Calculate the net present value of this project if inflation is
expected to be 4% in each year and the firm employs a nominal
discount rate of 10%.

An investment cost $10,000 with expected cash flows of
$3,000 a year for 5 years. At what discount rate will the project’s
IRR equal its discount rate?
27.22%
15.24%
0%
16.67%
21.08%

A project has the following cash flow.
Year
Costs
Benefits
0
$10,000
0
1
$1,000
$5,000
2
$1,000
$5,000
3
$2,000
$6,000
4
$2,0000
$3,000
Assuming a discount rate of 10%, estimate the following:
a)Net Present Value (NPV)
b)Discounted Benefit-Cost Ratio
c)Net discounted Benefit-Cost Ratio
d)Is the project feasible? Explain your answer

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