Question

A firm evaluates all of its projects by using the NPV decision rule. |

Year | Cash Flow | ||

0 | –$26,000 | ||

1 | 21,000 | ||

2 | 15,000 | ||

3 | 7,000 | ||

a. At a
required return of 23 percent, what is the NPV for this
project? |

b. At a
required return of 36 percent, what is the NPV for this
project? |

Answer #1

a.Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=21000/1.23+15000/1.23^2+7000/1.23^3

=$30749.59

NPV=Present value of inflows-Present value of outflows

=$30749.59-$26000

**=$4749.59(Approx).**

b.Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=21000/1.36+15000/1.36^2+7000/1.36^3

=$26,333.83

NPV=Present value of inflows-Present value of outflows

=$26,333.83-$26000

**=$333.83(Approx).**

A firm evaluates all of its projects by using the NPV decision
rule.
Year
Cash
Flow
0
–$29,000
1
22,000
2
17,000
3
7,000
a. At a required return of 23 percent, what is
the NPV for this project?
b. At a required return of 33 percent, what is
the NPV for this project?

A firm evaluates all of its projects by using the NPV decision
rule.
Year
Cash
Flow
0
–$31,000
1
21,000
2
12,000
3
5,000
a. At a required return of 15 percent, what is
the NPV for this project?
b. At a required return of 40 percent, what is
the NPV for this project?

A firm evaluates all of its projects by using the NPV decision
rule.
Year
Cash
Flow
0
–$31,000
1
20,000
2
15,000
3
8,000
a. At a required return of 12 percent, what is
the NPV for this project?
b. At a required return of 32 percent, what is
the NPV for this project?

A firm evaluates all of its projects by using the NPV decision
rule.
Year
Cash
Flow
0
–$25,000
1
22,000
2
13,000
3
8,000
Required:
(a)
At a required return of 23 percent, what is the NPV for this
project?
(b)
At a required return of 41 percent, what is the NPV for this
project?

A firm evaluates
all of its projects by using the NPV decision rule.
Year
Cash
Flow
0
–$29,000
1
20,000
2
14,000
3
10,000
a. At a required return of 19 percent, what is the
NPV for this project?
b. At a required return of 34 percent, what is the
NPV for this project?

A firm evaluates all of its projects by using the NPV decision
rule.
Year
Cash
Flow
0
–$28,000
1
19,000
2
13,000
3
9,000
a. At a required return of 14 percent, what is
the NPV for this project?
b. At a required return of 39 percent, what is
the NPV for this project?

A firm evaluates all of its projects by using the NPV decision
rule.
Year
Cash
Flow
0
–$29,000
1
20,000
2
16,000
3
5,000
a. At a required return of 25 percent, what is
the NPV for this project?
b. At a required return of 41 percent, what is
the NPV for this project?

A firm evaluates all of its
projects by using the NPV decision rule.
Year
Cash
Flow
0
–$27,000
1
20,000
2
16,000
3
7,000
Required:
(a)
At a required return of 21
percent, what is the NPV for this project?
(Click to select)4,232.12
4,320.29
4,628.88
,408.464
4496.63
(b)
At a required return of 34
percent, what is the NPV for this project?
(Click to select)
-259.78
-267.42
-244.5
-254.69
-249.6

A firm evaluates all of its projects by using the NPV decision
rule
Year Cash Flow
0
-31,000
1
23,000
2
13,000
3
11,000
At a required return of 17 percent, what is the NPV for this
project?
5,023
$5,274
$4,822
$5,123
$4,922
b. At a required return of 34 percent, what is
the NPV for this project?
$-2,125.40
$-1,943.23
$-2,064.68
$-1,983.71
$-2,024.20

A firm evaluates all of its projects by using the NPV decision
rule. Year Cash Flow 0 –$27,000 1 20,000 2 13,000 3 8,000 a. At a
required return of 13 percent, what is the NPV for this project? b.
At a required return of 33 percent, what is the NPV for this
project?
A project that provides annual cash flows of $10,600 for 8
years costs $56,550 today.
a. If the required return is 7 percent, what
is...

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