Question

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

Answer #1

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

Cell reference -

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 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 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 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
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%.
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
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 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
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
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?

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