Question

A project expects to generate cash flows of $ 10,490 per year, at the end of...

A project expects to generate cash flows of $ 10,490 per year, at the end of each year for the next 6 years, with an initial investment of $ 50,000. The internal rate of return (IRR) is

a. 7%

b. 30%

c. 5%

d. 21%

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
If an investment project is described by the sequence of cash flows: Year Cash flow 0...
If an investment project is described by the sequence of cash flows: Year Cash flow 0 -300 1 -900 2 1100 3 500                 Calculate the MIRR, we will assume a finance rate of 8% and a reinvestment rate of 10%   [5] Find the IRR (using 7%, 10%, 11%) of an investment having initial cash outflow of $3,000. The cash inflows during the first, second, third and fourth years are expected to be $700, $800, $900 and $1,200 respectively            [5]...
1. Project A, which costs of $1,000 to purchase, will generate net cash inflows equal to...
1. Project A, which costs of $1,000 to purchase, will generate net cash inflows equal to $500 at the end of each of the next three years. The project's required rate of return is 10 percent. What are the project's internal rate of return (IRR) and modified internal rate of return (MIRR)? 23.4%; 38.2% 14.5%; 12.6% 16.7%; 18.3% 23.4%; 16.7% 23.4%; 18.3% 2. The internal rate of return (IRR) of a project that generates its largest cash flows in the...
a project with an initial cost of $50,670 is expected to generate annual cash flows of...
a project with an initial cost of $50,670 is expected to generate annual cash flows of $15,590 for the next 5 years. what is the projects internal rate of
A firm is considering a project that will generate net cash flows of $50,000 per year...
A firm is considering a project that will generate net cash flows of $50,000 per year for ten years beginning immediately. The project has the same risk as the firm's overall operations. If the firm's debt-to-equity ratio is 0.75, its required return on equity is 8% and its required return on debt is 6%, what is the most it could pay for the project? (Assume the firm pays no taxes) Select one: a. $435,504 b. $373,830 c. $235,960 d. $212,868...
A firm is planning a new project that is projected to yield cash flows of -...
A firm is planning a new project that is projected to yield cash flows of - $595,000 in Year 1, $586,000 per year in Years 2 through 5, and $578,000 in Years 6 through 11. This investment will cost the company $2,580,000 today (initial outlay). We assume that the firm's cost of capital is 11%. 1. Compute the projects payback period, net present value (NPV), profitability index (PI), internal rate of return (IRR), and modified internal rate of return (MIRR)....
A project will generate the following cash flows. If the required rate of return is 15%,...
A project will generate the following cash flows. If the required rate of return is 15%, what is the project’s net present value? Year Cash flow 0 –$50,000 1 $15,000 2 $16,000 3 $17,000 4 $18,000 5 $19,000 Select one: a. $16,790.47 b. $6,057.47 c. $3,460.47 d. $1,487.21 e. –$3,072.47 Question 5 Not yet answered Marked out of 1.00 Flag question Question text A project will generate the following cash flows. The required rate of return is 15%. If the...
A project requires an initial investment of $1.2 million. It expects to generate a perpetual cash...
A project requires an initial investment of $1.2 million. It expects to generate a perpetual cash flow. The first year cash flow is expected at $100,000. The cash flows are then expected to grow at 1.25% forever. The appropriate cost of capital for this project is 11%. What is the project's IRR and should it be accepted based on the IRR rule? Group of answer choices IRR is 11.6%; project should be accepted IRR is 11.6%; project should not be...
Project P costs $15,000 and is expected to produce benefits (cash flows) of $4,500 per year...
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...
The IRR evaluation method assumes that cash flows from the project are reinvested at a rate...
The IRR evaluation method assumes that cash flows from the project are reinvested at a rate equal to the project’s IRR. However, in reality, the reinvested cash flows may not necessarily generate a return equal to the IRR. Thus, using the modified IRR approach, you can make a more reasonable estimate of a project’s rate of return than the project’s IRR can. Consider the following situation: Cold Goose Metal Works Inc. is analyzing a project that requires an initial investment...
The IRR evaluation method assumes that cash flows from the project are reinvested at the same...
The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested cash flows may not necessarily generate a return equal to the IRR. Thus, the modified IRR approach makes a more reasonable assumption other than the project’s IRR. Consider the following situation: Blue Llama Mining Company is analyzing a project that requires an initial investment of $450,000. The project’s expected cash flows are: Year Cash...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT