Question

A project will produce an operating cash flow of $10,000 a year for three years. The...

A project will produce an operating cash flow of $10,000 a year for three years. The initial cash investment in the project will be $20,600. An additional $2,5000 of net working capital will be required throughout the life of the project. What is the internal rate of return for the project?

Group of answer choices

21.44%

18.43%

14.30%

30.24%

4.54%

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
A project will produce an operating cash flow of $385,000 a year for three years. The...
A project will produce an operating cash flow of $385,000 a year for three years. The initial cash outlay for equipment will be $850,000. The net aftertax salvage value of $50,000 will be received at the end of the project. The project requires $72,000 of net working capital up front that will be fully recovered. What is the net present value of the project if the required rate of return is 14 percent? $45,915.26 $51,208.72 $59,612.87 $54,174.86 $47,320.15
A project will produce an operating cash flow of $358,000 a year for four years. The...
A project will produce an operating cash flow of $358,000 a year for four years. The initial cash outlay for equipment will be $785,000. The net aftertax salvage value of $42,000 will be received at the end of the project. The project requires $78,000 of net working capital that will be fully recovered when the project ends. What is the net present value of the project if the required rate of return is 14 percent? $237,613 $251,159 $274,300 $290,184 $309,756...
A project will produce an operating cash flow of $283,000 a year for four years. The...
A project will produce an operating cash flow of $283,000 a year for four years. The initial cash outlay for equipment will be $631,000. An aftertax salvage value of $42,000 for the equipment will be received at the end of the project. The project requires $56,000 of net working capital that will be fully recovered. What is the net present value of the project if the required rate of return is 16 percent? $166,218.32 $159,009.65 $151,870.15 $143,218.96 $137,642.18
A project will produce an operating cash flow of $475,000 a year for four years. The...
A project will produce an operating cash flow of $475,000 a year for four years. The initial cash outlay for equipment will be $1,080,000. The net aftertax salvage value of $81,000 will be received at the end of the project. The project requires $142,000 of net working capital up front that will be fully recovered. What is the net present value of the project if the required rate of return is 14 percent? $294,047.25 $308,116.57 $281,547.93 $317,286.90 $272,430.06
Wellpoint Company is considering an investment project that will produce an operating cash flow of $415,200...
Wellpoint Company is considering an investment project that will produce an operating cash flow of $415,200 a year for five years. The initial cash outlay for equipment will be $1,027,000. An aftertax salvage value of $82,160 for the equipment will be received at the end of the project. The project requires $154,050 of net working capital that will be fully recovered. What is the net present value of the project if the required rate of return is 14 percent? $388,174.80...
A new expansion project will produce operating cash flows of $90,000 a year for four years....
A new expansion project will produce operating cash flows of $90,000 a year for four years. During the life of the project, inventory will increase by $35,000 and accounts receivable will decrease by $10,000. Accounts payable will increase by $15,000, and wages payable will increase by $5,000. At the end of the project, net working capital will return to its normal level. The project requires the purchase of equipment at an initial cost of $70,000. Equipment delivery and installation costs...
1. A project will produce an operating cash from of $33,000 a year for 10 years....
1. A project will produce an operating cash from of $33,000 a year for 10 years. The initial fixed asset investment in the project will be $195,000. The net after-tax salvage value is estimated at $50,000 and will be received during the last year of the project’s life. What is the net present value (NPV) of the project if the required rate of return is 10 percent?
A production project will generate an expected operating cash flow of $50,000 per year for 4...
A production project will generate an expected operating cash flow of $50,000 per year for 4 years (years 1 – 4). Undertaking the project will require an increase in the company’s net working capital (inventory) of $10,000 today (year 0). At the end of the project (year 4), inventory will return to the original level. The project would cost $150,000. The marginal tax rate is 35%. The weighted average cost of capital for the firm is 9%. Sketch a timeline...
You are considering the following project. What is the expected cash flow for the last year...
You are considering the following project. What is the expected cash flow for the last year (year 3)? This cash flow includes operating cash flow and terminal cash flow. Project life: 3 years Equipment: Cost: $20,000 Economic life: 3 years Salvage value: $4,000 Initial investment in net working capital: $2,000 Revenue: $13,000 in year 1, with a nominal growth rate of 6% per year Fixed cost: $3,000 in year 1 Variable cost: 30% of revenue Corporate tax rate (T): 40%...
Ronnie's Coffee House is considering a project with a life of one year that will produce...
Ronnie's Coffee House is considering a project with a life of one year that will produce sales of $6,000 and increase cash expenses by $2,500. If the project is implemented, taxes will increase by $700. The additional depreciation expense will be $200 and interest expense will increase by $100. An initial cash outlay of $200 is required for net working capital. What is the amount of the operating cash flow using the top-down approach? A. $2,200 B. $3,500 C. $1,500...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT