Question

The Camel Company is considering the following project. Assume discount rate of 12%. ​Year​Cash Flow ​0​-100,000...

The Camel Company is considering the following project. Assume discount rate of 12%.

​Year​Cash Flow

​0​-100,000

​1​+25,000​​

​2​+50,000

​3​+55,000

​4​+75,000

(a) Compute NPV. Should the company accept or reject this project. Justify.

(b) Compute IRR. Should the company accept or reject this project. Justify.

(c) Compute PI. Should the company accept or reject this project. Justify.

(d) Compute payback period. Should the company accept or reject this project. Justify.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Telesis Corp is considering a project that has the following cash flows: Year Cash Flow 0...
Telesis Corp is considering a project that has the following cash flows: Year Cash Flow 0 -$1,000 1 400 2 300 3 500 4 400 The company’s weighted average cost of capital (WACC) is 10%. What are the project’s payback period (Payback), internal rate of return (IRR), net present value (NPV), and profitability index (PI)? A. Payback = 3.5, IRR = 10.22%, NPV = $1260, PI=1.26 B. Payback = 2.6, IRR = 21.22%, NPV = $349, PI=1.35 C. Payback =...
ABC Corporation is considering a project that provides the following cash flows steam: Year 0 1...
ABC Corporation is considering a project that provides the following cash flows steam: Year 0 1 2 3 4 5 Cash flows -$1,000 $375 $425 $250 $110 $100 If WACC is 10%, what is NPV, and should the company accept the project? Find IRR, MIRR, payback, and discounted payback period.
Risky Business is looking at a project with the following estimated cash​ flow: Initial investment at...
Risky Business is looking at a project with the following estimated cash​ flow: Initial investment at start of​ project: ​$13,000,000 Cash flow at end of year​ one: $2,080,000 Cash flow at end of years two through​ six: $2,600,000 each year Cash flow at end of years seven through​ nine: $2,496,000 each year Cash flow at end of year​ ten: $1,920,000 Risky Business wants to know the payback​ period, NPV,​ IRR, MIRR, and PI of this project. The appropriate discount rate...
ABC Corporation is considering a project that provides the following cash flows steam: Year 0 1...
ABC Corporation is considering a project that provides the following cash flows steam: Year 0 1 2 3 4 5 Cash flows -$1,000 $375 $425 $250 $110 $100 If WACC is 10%, what is NPV and should the company accept the project? Find IRR, MIRR, payback, and discounted payback period. Considering the following projects. Project Year 0 1 2 3 4 A Cash flows -$100 $35 $35 $35 $35 B Cash flows -$100 $60 $50 $40 $30 Project A has...
​(Discounted payback period​) Sheinhardt Wig Company is considering a project that has the following cash​ flows:...
​(Discounted payback period​) Sheinhardt Wig Company is considering a project that has the following cash​ flows: If the​ project's appropriate discount rate is 9 ​percent, what is the​ project's discounted payback​ period? The​ project's discounted payback period is nothing years. ​(Round to two decimal​ places.) YEAR   PROJECT CASH FLOW 0   -60,000 1   20,000 2   50,000 3   65,000 4   55,000 5   40,000
Q5 A company is considering a project that is expected to produce the following cash flows...
Q5 A company is considering a project that is expected to produce the following cash flows over the next five years: $22,500, $27,900, $41,800, $33,000, and $15,000 respectively. The company has $98,000 available, which is the amount needed to initiate the project. Should the company accept this project if the required rate of return is 12%? Why or why not? Question 5 options: No; The IRR is 13.47%, which is greater than the required return. Yes; The PI is.96, which...
(Payback ​period, NPV,​ PI, and IRR calculations​) You are considering a project with an initial cash...
(Payback ​period, NPV,​ PI, and IRR calculations​) You are considering a project with an initial cash outlay of ​$75,000 and expected free cash flows of ​$26,000 at the end of each year for 5 years. The required rate of return for this project is 7 percent. a. What is the​ project's payback​ period? b. What is the​ project's NPV​? c. What is the​ project's PI​? d. What is the​ project's IRR​?
Suppose Cute Camel Woodcraft Company is evaluating a proposed capital budgeting project (project Alpha) that will...
Suppose Cute Camel Woodcraft Company is evaluating a proposed capital budgeting project (project Alpha) that will require an initial investment of $450,000. The project is expected to generate the following net cash flows: Year Cash Flow Year 1 $375,000 Year 2 $475,000 Year 3 $400,000 Year 4 $500,000 Cute Camel Woodcraft Company’s weighted average cost of capital is 10%, and project Alpha has the same risk as the firm’s average project. Based on the cash flows, what is project Alpha’s...
Risky Business is looking at a project with the following estimated cash​ flow: Risky Business wants...
Risky Business is looking at a project with the following estimated cash​ flow: Risky Business wants to know the payback​ period, NPV,​ IRR, MIRR, and PI of this project. The appropriate discount rate for the project is 8​%.   If the cutoff period is 6 years for major​ projects, determine whether the management at Risky Business will accept or reject the project under the five different decision models. Initial investment at start of project   13,500,000 Cash flow at end of year...
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...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT