Question

IRR of the project is 8.02 Based on this IRR Facebook SHOULD move forward with this...

IRR of the project is 8.02

Based on this IRR Facebook SHOULD move forward with this project.

a ) True

b ) False

Apple is contemplating a new project where they will not have ads or click bait but will charge customers for using Facebook. They are estimating that they will invest $270,000 initially then will have positive cash flows over the next four years of:

Year 1: $50,000

Year 2: $85,000

Year 3: $130,000

Year 4: $65,000

WACC of 9%.

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
   Your firm is considering two projects with the following cash flows. WACC 6% 6% year...
   Your firm is considering two projects with the following cash flows. WACC 6% 6% year Project A Project B 0                              -55,000         -70,000 1                                10,000          10,000 2                                  9,000          10,000 3                                  8,000          10,000 4                                  7,500          10,000 5                                  7,500          10,000 6                                  7,500          10,000 7                                  7,500          10,000 8                                  7,500          12,000 a. Calculate NPV and IRR for both projects NPV IRR b. Do the following 2...
1. Learning Objectives (a)  Develop proforma Project Income Statement Using Excel Spreadsheet (b)  Compute  Net Project Cash flows, NPV,  IRR...
1. Learning Objectives (a)  Develop proforma Project Income Statement Using Excel Spreadsheet (b)  Compute  Net Project Cash flows, NPV,  IRR and PayBack Period 1) Life Period of the Equipment = 4 years 8) Sales for first year (1) $     200,000 2) New equipment cost $          (200,000) 9) Sales increase per year 4% 3) Equipment ship & install cost $            (25,000) 10) Operating cost: $    (120,000) 4) Related start up cost $              (5,000)     (60 Percent of Sales) -60% 5) Inventory increase $             25,000 11) Depreciation (Straight Line)/YR $      (60,000) 6) Accounts Payable...
1. Learning Objectives (a)  Develop proforma Project Income Statement Using Excel Spreadsheet (b)  Compute  Net Project Cash flows, NPV,  IRR...
1. Learning Objectives (a)  Develop proforma Project Income Statement Using Excel Spreadsheet (b)  Compute  Net Project Cash flows, NPV,  IRR and PayBack Period 1) Life Period of the Equipment = 4 years 8) Sales for first year (1) $     200,000 2) New equipment cost $          (200,000) 9) Sales increase per year 4% 3) Equipment ship & install cost $            (25,000) 10) Operating cost: $    (120,000) 4) Related start up cost $              (5,000)     (60 Percent of Sales) -60% 5) Inventory increase $             25,000 11) Depreciation (Straight Line)/YR $      (60,000) 6) Accounts Payable...
1. Learning Objectives (a)  Develop proforma Project Income Statement Using Excel Spreadsheet (b)  Compute  Net Project Cash flows, NPV,  IRR...
1. Learning Objectives (a)  Develop proforma Project Income Statement Using Excel Spreadsheet (b)  Compute  Net Project Cash flows, NPV,  IRR and PayBack Period 1) Life Period of the Equipment = 4 years 8) Sales for first year (1) $     200,000 2) New equipment cost $          (200,000) 9) Sales increase per year 4% 3) Equipment ship & install cost $            (25,000) 10) Operating cost: $    (120,000) 4) Related start up cost $              (5,000)     (60 Percent of Sales) -60% 5) Inventory increase $             25,000 11) Depreciation (Straight Line)/YR $      (60,000) 6) Accounts Payable...
Based on the information from Question 47, what is the profitability index (PI) of this project?...
Based on the information from Question 47, what is the profitability index (PI) of this project? a. 0.87 b. 1.11 c. 1.31 d. 1.83. Based on the information from Question 47, what is the internal rate of return (IRR) of this project? a. 14.03% b. 17.56% c. 19.26% d. 21.78% Based on the information from Question 47. What is the net present value (NPV) of the project? a. $28,830.29 b. $30,929.26 c. $36,931.43 d. $39,905.28 A company is considering a...
A mining company is considering a new project. Because the mine has received a permit, the...
A mining company is considering a new project. Because the mine has received a permit, the project would be legal; but it would cause significant harm to a nearby river. The firm could spend an additional $10.33 million at Year 0 to mitigate the environmental Problem, but it would not be required to do so. Developing the mine (without mitigation) would require an initial outlay of $63 million, and the expected cash inflows would be $21 million per year for...
A mining company is considering a new project. Because the mine has received a permit, the...
A mining company is considering a new project. Because the mine has received a permit, the project would be legal; but it would cause significant harm to a nearby river. The firm could spend an additional $10.66 million at Year 0 to mitigate the environmental Problem, but it would not be required to do so. Developing the mine (without mitigation) would require an initial outlay of $66 million, and the expected cash inflows would be $22 million per year for...
A mining company is considering a new project. Because the mine has received a permit, the...
A mining company is considering a new project. Because the mine has received a permit, the project would be legal; but it would cause significant harm to a nearby river. The firm could spend an additional $9 million at Year 0 to mitigate the environmental Problem, but it would not be required to do so. Developing the mine (without mitigation) would require an initial outlay of $51 million, and the expected cash inflows would be $17 million per year for...
A mining company is considering a new project. Because the mine has received a permit, the...
A mining company is considering a new project. Because the mine has received a permit, the project would be legal; but it would cause significant harm to a nearby river. The firm could spend an additional $11 million at Year 0 to mitigate the environmental Problem, but it would not be required to do so. Developing the mine (without mitigation) would cost $69 million, and the expected cash inflows would be $23 million per year for 5 years. If the...
A mining company is considering a new project. Because the mine has received a permit, the...
A mining company is considering a new project. Because the mine has received a permit, the project would be legal; but it would cause significant harm to a nearby river. The firm could spend an additional $10.33 million at Year 0 to mitigate the environmental Problem, but it would not be required to do so. Developing the mine (without mitigation) would require an initial outlay of $63 million, and the expected cash inflows would be $21 million per year for...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT