Question

You are evaluating a project that will cost

$ 515, 000

,

but is expected to produce cash flows of

$ 122 comma 000

per year for

10

years, with the first cash flow in one year. Your cost of capital is

11.1 %

and your company's preferred payback period is three years or less.

a. What is the payback period of this project?

b. Should you take the project if you want to increase the value of the company?

a. What is the payback period of this project?

The payback period is

nothing

years. (Round to two decimal places.)

b. Should you take the project if you want to increase the value of the company? (Select from the drop-down menus.)

If you want to increase the value of the company you

▼

will

will not

take the project since the NPV is

▼

positive

negative

.

Answer #1

You are evaluating a project that will cost $ 456 comma 000,
but is expected to produce cash flows of $ 124 comma 000 per year
for 10 years, with the first cash flow in one year. Your cost of
capital is 11.2 % and your company's preferred payback period is
three years or less. a. What is the payback period of this
project?

1.-You are evaluating a project that will cost $499,000, but is
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with the first cash flow in one year. Your cost of capital is 10.6%
and your company's preferred payback period is three years or
less.
a. What is the payback period of this project?
b. Should you take the project if you want to increase the value
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Year 1
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conventional, payback period is 2.50 years.
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Year
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Year 1
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project’s net present value (NPV). You don’t know the project’s
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conventional, payback period is 2.50 years.
The project's annual cash flows are:
Year
Cash Flow
Year 1
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Year 2
550,000
Year 3
400,000
Year 4
300,000
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im evaluating a project that will cost 500,000, but is expected
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Payback, NPV, and IRR Rieger International is evaluating the
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$95 comma 00095,000
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LOADING...
. The firm has a
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