Question

A project has an initial cost of $36,075, expected net cash inflows of $14,000 per year for 7 years, and a cost of capital of 10%. What is the project's MIRR? Do not round intermediate calculations. Round your answer to two decimal places. Answer = _____________________

A project has an initial cost of $48,675, expected net cash inflows of $14,000 per year for 10 years, and a cost of capital of 13%. What is the project's PI? Do not round your intermediate calculations. Round your answer to two decimal places. Answer = ______________________

A project has an initial cost of $56,425, expected net cash inflows of $13,000 per year for 9 years, and a cost of capital of 12%. What is the project's payback period? Round your answer to two decimal places. Answer = __________________________

A project has an initial cost of $35,000, expected net cash inflows of $8,000 per year for 7 years, and a cost of capital of 11%. What is the project's discounted payback period? Round your answer to two decimal places. Answer = _______________________

Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $19 million, and production and sales will require an initial $1 million investment in net operating working capital. The company's tax rate is 35%.

- What is the initial investment outlay? Write out your answer
completely. For example, 2 million should be entered as
2,000,000.

$ - The company spent and expensed $150,000 on research related to
the new project last year. Would this change your answer?

-Select-Yes or NO - Rather than build a new manufacturing facility, the company
plans to install the equipment in a building it owns but is not now
using. The building could be sold for $1.5 million after taxes and
real estate commissions. How would this affect your answer?

The project's cost will -Select- increase , decrease or not change

Answer #1

Answer to Question 1:

Initial Investment = $36,075

Annual Cash Inflows = $14,000

Life of Project = 7 years

Cost of Capital = 10%

Future Value of Cash Inflows = $14,000*1.10^6 + $14,000*1.10^5 +
… + $14,000*1.10 + $14,000

Future Value of Cash Inflows = $14,000 * (1.10^7 - 1) / 0.10

Future Value of Cash Inflows = $14,000 * 9.487171

Future Value of Cash Inflows = $132,820.394

MIRR = (Future Value of Cash Inflows / Initial
Investment)^(1/Period) - 1

MIRR = ($132,820.394 / $36,075)^(1/7) - 1

MIRR = 3.681785^(1/7) - 1

MIRR = 1.2047 - 1

MIRR = 0.2047 or 20.47%

Answer to Question 2:

Initial Investment = $48,675

Annual Cash Inflows = $14,000

Life of Project = 10 years

Cost of Capital = 13%

Present Value of Cash Inflows = $14,000/1.13 + $14,000/1.13^2 +
… + $14,000/1.13^9 + $14,000/1.13^10

Present Value of Cash Inflows = $14,000 * (1 - (1/1.13)^10) /
0.13

Present Value of Cash Inflows = $14,000 * 5.426243

Present Value of Cash Inflows = $75,967.402

Profitability Index = Present Value of Cash Inflows / Initial
Investment

Profitability Index = $75,967.402 / $48,675

Profitability Index = 1.56

A project has an initial cost of $62,725, expected net cash
inflows of $14,000 per year for 7 years, and a cost of capital of
10%. What is the project's MIRR? Do not round intermediate
calculations. Round your answer to two decimal places.

1. A project has an initial cost of $74,475, expected net cash
inflows of $9,000 per year for 8 years, and a cost of capital of
12%. What is the project's MIRR? Do not round intermediate
calculations. Round your answer to two decimal places.
2. A project has an initial cost of $46,800, expected net cash
inflows of $10,000 per year for 6 years, and a cost of capital of
13%. What is the project's PI? Do not round your...

A project has an initial cost of $45,000, expected net cash
inflows of $14,000 per year for 7 years, and a cost of capital of
13%. What is the project's PI? (Hint: Begin by
constructing a time line.) Do not round intermediate calculations.
Round your answer to two decimal places.
My answer = 1.38. Would like to double check to see if that is
correct.

A project has an initial cost of $50,150, expected net cash
inflows of $13,000 per year for 9 years, and a cost of capital of
12%. What is the project's payback period? Round your answer to two
decimal places.

A project has an initial cost of $53,175, expected net cash
inflows of $12,000 per year for 9 years, and a cost of capital of
13%. What is the project's payback period? Round your answer to two
decimal places.

A project has an initial cost of $60,000, expected net cash
inflows of $13,000 per year for 7 years, and a cost of capital of
11%. What is the project's payback period? Round your answer to two
decimal places.

A project has an initial cost of $35,000, expected net cash
inflows of $8,000 per year for 7 years, and a cost of capital of
11%. What is the project's discounted payback period? Round your
answer to two decimal places.

A project has an initial cost of $55,000, expected net cash
inflows of $12,000 per year for 8 years, and a cost of capital of
13%. What is the project's MIRR? (Hint: Begin by
constructing a time line.) Do not round intermediate calculations.
Round your answer to two decimal places.
A project has an initial cost of $55,000, expected net cash
inflows of $10,000 per year for 11 years, and a cost of capital of
12%. What is the project's...

A project has an initial cost of $74,125, expected net cash
inflows of $14,000 per year for 11 years, and a cost of capital of
13%. What is the project's NPV? (Hint: Begin by constructing a time
line.) Do not round your intermediate calculations. Round your
answer to the nearest cent.

A project has an
initial cost of $54,650, expected net cash inflows of $14,000 per
year for 9 years, and a cost of capital of 11%. What is the
project's NPV? (Hint: Begin by constructing a time line.)
Do not round your intermediate calculations. Round your answer to
the nearest cent.

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