Question

You've collected the following information on a project: 3 year project, WACC of 8%.  A depreciable basis...

You've collected the following information on a project:

3 year project, WACC of 8%.  A depreciable basis of $200,000, and a required NOWC investment of $20,000, returned to the company at the end of year 3. The project has operating CFs of $85,000 in years 1, 2, and 3, and a terminal CF of $5,000.

1) Put the above information into a table with labeled rows and columns t=0, 1, 2, and 3 and determine the overall project cash flows.

3) Calculate the NPV and IRR

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

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
You've collected the following information on a project: 3 year project, WACC of 8%.  A depreciable basis...
You've collected the following information on a project: 3 year project, WACC of 8%.  A depreciable basis of $200,000, and a required NOWC investment of $20,000, returned to the company at the end of year 3. The project has operating CFs of $85,000 in years 1, 2, and 3, and a terminal CF of $5,000. 1) Put the above information into a table with labeled rows and columns t=0, 1, 2, and 3 and determine the overall project cash flows. 3)...
You've collected the following information on a project: 3 year project, WACC of 8%. A depreciable...
You've collected the following information on a project: 3 year project, WACC of 8%. A depreciable basis of $200,000, and a required NOWC investment of $20,000, returned to the company at the end of year 3. The project has operating CFs of $85,000 in years 1, 2, and 3, and a terminal CF of $5,000. 1) Put the above information into a table with labeled rows and columns t=0, 1, 2, and 3 and determine the overall project cash flows....
You've estimated the following cash flows (in $) for a project: A B 1 Year Cash...
You've estimated the following cash flows (in $) for a project: A B 1 Year Cash flow 2 0 -3,430 3 1 974 4 2 1,281 5 3 1,996 The required return is 8.5%. 1. What is the IRR for the project? 2. What is the NPV of the project? 3 .What should you do? Check all that apply: Reject the project based on its NPV Reject the project based on its IRR Accept the project based on its IRR...
Intro You've estimated the following cash flows (in $) for a project: A B 1 Year...
Intro You've estimated the following cash flows (in $) for a project: A B 1 Year Cash flow 2 0 -3,200 3 1 974 4 2 1,281 5 3 1,647 The required return is 8.5%. Attempt 1/1 for 10 pts. Part 1 What is the IRR for the project? Submit Attempt 1/1 for 10 pts. Part 2 What is the NPV of the project? Submit Attempt 1/1 for 10 pts. Part 3 What should you do? Check all that apply:...
You've estimated the following cash flows (in $) for two mutually exclusive projects: Year Project A...
You've estimated the following cash flows (in $) for two mutually exclusive projects: Year Project A Project B 0 -5,600 -8,400 1 1,325 1,325 2 2,148 2,148 3 4,193 8,192 The required return for both projects is 8%. Part 1 : What is the IRR for project A? 3+ Decimals Part 2 What is the IRR for project B? 3+ Decimals Part 3 Which project seems better according to the IRR method? Project A or Project B Part 4 What...
You've estimated the following cash flows (in $) for a project: The required return is 8.5%....
You've estimated the following cash flows (in $) for a project: The required return is 8.5%. What is the IRR for the project? What is the NPV of the project? A B 1 Year Cash flow 2 0 -3,320 3 1 974 4 2 1,281 5 3 1,875
   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...
Consider the following two projects: Project Year 0 CF Year 1 CF Year 2 CF Year...
Consider the following two projects: Project Year 0 CF Year 1 CF Year 2 CF Year 3 CF Year 4 CF Cost of capital A -100 40 50 60 10 15% B -73 30 30 30 30 15% The IRR of project A =? maybe round this one to the closest? A) 7.7% B) 21.6% C) 23.3% D) 42.9% The IRR of project B =? A) 21.6% B) 23.3% C) 42.9% D) 7.7% Which of the following statements is correct?...
You've estimated the following cash flows (in $) for two projects: Year Project A Project B...
You've estimated the following cash flows (in $) for two projects: Year Project A Project B 0 -5,100 -7,650 1 1,325 1,325 2 2,148 2,148 3 3,444 6,967 The required return for both projects is 8%. What is the NPV for project A? What is the NPV for project B? Which project seems better according to the NPV method? Project A or Project B
You've estimated the following cash flows (in $) for two projects: Year Project A Project B...
You've estimated the following cash flows (in $) for two projects: Year Project A Project B 0 -5,400 -8,100 1 1,325 1,325 2 2,148 2,148 3 3,942 7,751 The required return for both projects is 8%. A:What is the NPV for project A? B:What is the NPV for project B? C:Which project seems better according to the NPV method?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT