Question

A company is considering a project that has an up-front cost paid today at t =...

A company is considering a project that has an up-front cost paid today at t = 0. The project will generate positive cash flows of $52,785 a year at the end of each for the next 6 years. The project’s NPV is $82,504 and the company’s return on the project is 8.9 percent. What is the project’s payback?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

In order to find the payback period we need to find the initial investment. the caluclation is below.

And the payback period caluclation is here,

The paybach period is 3Years and 2 months.

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
A company is considering a project that has an up-front cost paid today at t =...
A company is considering a project that has an up-front cost paid today at t = 0. The project will generate positive cash flows of $56,187 a year at the end of each for the next 5 years. The project’s NPV is $95,484 and the company’s return on the project is 8.4 percent. What is the project’s payback?
Belanger Construction is considering the following project. The project has an up-front cost and will also...
Belanger Construction is considering the following project. The project has an up-front cost and will also generate the following subsequent cash flows:             t = 1      $400             t = 2      500             t = 3      200 The project’s payback is 1.5 years, and it has a cost of capital of 10 percent. What is the project’s modified internal rate of return (MIRR)?
1.) Nebraska Instruments (NI) is considering a project that has an up-front after tax cost at...
1.) Nebraska Instruments (NI) is considering a project that has an up-front after tax cost at t = 0 of $1,000,000. The project’s subsequent cash flows critically depend on whether its products become the industry standard. There is a 60 percent chance that the products will become the industry standard, in which case the project’s expected after- tax cash flows will be $900,000 at the end of each of the next three years (t = 1,2,3). There is a 40...
13-2 a. Project X has an up-front cost of $20 million. The project is expected to...
13-2 a. Project X has an up-front cost of $20 million. The project is expected to produce after-tax cash flows of $7.5 million at the end of each of the next 3 years (t = 1, 2, and 3). The project has a WACC=10%. What is the project’s NPV? b. However, if the company waits a year they will find out more about the project’s expected cash flows. If they wait a year, there is a 50% chance the market...
Nippon Inc is considering a project that has an up-front cost of $500,000. The project’s subsequent...
Nippon Inc is considering a project that has an up-front cost of $500,000. The project’s subsequent cash flows depend on whether its products become the industry standard. There is a 60% chance that products will become the industry standard, in which case the project’s expected cash flows will be $120,000 per year for the next 7 years. There is a 40% chance that products will not become the industry standard, in which case the project’s expected cash flows will be...
A company is considering a new project that will cost $750,000. The project is expected to...
A company is considering a new project that will cost $750,000. The project is expected to generate positive cash flows over the next four years in the amounts of $300,000 in year one, $325,000 in year two, $150,000 in year three, and $180,000 in year four. The required rate of return is 8%. What is the project’s payback period? 2.60 years 2.83 years 2.63 years 2.33 years 2.50 years
You are considering a project with an initial cash outlay of $100,000 and expected free cash...
You are considering a project with an initial cash outlay of $100,000 and expected free cash flows of $23,000 at the end of each year for 6 years. The required rate of return for this project is 10 percent. a. What is the project’s payback period? b. What is the project’s discounted payback period? c. What is the project’s NPV ? d. What is the project’s PI ? e. What is the project’s IRR ? f. What is the project’s...
1. You must find the payback for a project, and you have misplaced some of the...
1. You must find the payback for a project, and you have misplaced some of the information that you were given. You know that the project will generate positive cash flows of $60,000 per year at the end of each of the next 5 years, that its NPV is $75,000, and that the company’s WACC is 10%. What is the project’s regular payback
Johnson Jets is considering two mutually exclusive projects. Project A has an up-front cost of $124,000...
Johnson Jets is considering two mutually exclusive projects. Project A has an up-front cost of $124,000 (CF0 = -124,000), and produces positive after-tax cash inflows of $30,000 a year at the end of each of the next six years. Project B has an up-front cost of $59,000(CF0 = -59,000) and produces after-tax cash inflows of $20,000 a year at the end of the next four years. Assuming the cost of capital is 10.5%, 1. Compute the equivalent annual annuity of...
You are considering a new project that will cost $750,000. The project is expected to generate...
You are considering a new project that will cost $750,000. The project is expected to generate positive cash flows over the next four years in the amounts of $350,000 in year one, $325,000 in year two, $250,000 in year three, and $280,000 in year four. Your required rate of return is 8%. What is the discounted payback period of the project?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT