Question

LO 3 LO 4 7.

Calculating NPV and IRR. A project that provides annual cash flows of $2,620 for eight years costs $9,430 today. Is this a good project if the required return is 8 percent? What if it's 24 percent? At what discount rate would you be indifferent between accepting the project and rejecting it?

LO 4 9.

Calculating NPV. For the cash flows in the previous problem, what is the NPV at a discount rate of 0 percent? What if the discount rate is 10 percent? If it is 20 percent? If it is 30 percent?

LO 1 LO 3 19.

Payback Period and IRR. Suppose you have a project with a payback period exactly equal to the life of the project. What do you know about the IRR of the project? Suppose that the payback period is never. What do you know about the IRR of the project now?

LO 5 23.

MIRR. Suppose the company in the previous problem uses a discount rate of 11 percent and a reinvestment rate of 8 percent on all of its projects. Calculate the MIRR of the project using all three methods with these rates.

Answer #1

4.7)

Calculating NPV and IRR. A project that
provides annual cash flows of $1,710 for 10 years costs $7,560
today.
1. The NPV is $__________if the required rate of return is
10%.
2. The NPV is $__________if the required rate of return is
24%.
3. At what discount rate would you be indifferent between
accepting the project and rejecting it? I would be indifferent at
_____%
4. Using a finnancial calculator please show and explain
work.

A project that provides annual cash flows of $18,100 for eight
years costs $87,000 today. What is the NPV for the project if the
required return is 7 percent? What is the NPV for the project if
the required return is 19 percent? At what discount rate would you
be indifferent between accepting the project and rejecting it?

A project that
provides annual cash flows of $17,300 for nine years costs $79,000
today.
THREE QUESTIONS:
What is the NPV for
the project if the required return is 8 percent
What is the NPV for
the project if the required return is 20 percent
At what discount rate
would you be indifferent between accepting the project and
rejecting it ?

When NPV and IRR rules result in a conflicting decision
regarding acceptance of a project managers could use the MIRR.
It assumes reinvestment of projects' cash flows at the WACC, so
it produces results consistent with NPV method.
Let's try to find the MIRR for the project with the following
cash flows:
Initial cost of -800 at time zero, CF1 = 400, CF 2 = 570, CF3 =
-130.
Here we have two negative cash flows and two positive 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?

A project that provides annual
cash flows of $2,700 for nine years costs $8,800 today.
Requirement
1:
At a required return of 9 percent, what is the NPV of the
project? (Do not round intermediate calculations. Round
your answer to 2 decimal places (e.g.,
32.16).)
NPV
$
Requirement
2:
At a required return of 28 percent, what is the NPV of the
project? Use the IRR function. (Do not round intermediate
calculations. A negative amount should be indicated by a...

A project that provides annual cash flows of $12,500 for 8
years costs $65,000 today. At what discount rate would you be
indifferent between accepting the project or rejecting it? If the
required rate of return is 9%, what is the profitability index of
this project?

(Payback period, NPV, PI, and IRR calculations) You are
considering a project with an initial cash outlay of $80,000 and
expected free cash flows of $26,000 at the end of each year for 6
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?
a. The project's payback period is nothing years. (Round...

A project that provides annual cash flows of $12,500 for 8 years
costs $65,000 today. At what discount rate would you be indifferent
between accepting the project or rejecting it? If the required rate
of return is 9%, what is the profitability index of this project?
Please show work and calculation don't do it on excel

A project has the following cash flows. What is the payback
period, NPV, PI, IRR, MIRR, and EAA? Assume an interest rate of
5%.
Year CF ($)
0) -5,000
1). 2,700
2). 3,300
3) 1,400
4). 330
5) 340
Also upload your excel files showing your work.

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