Question

17. ABC Inc. is considering a project that has the following cash flows:

Year |
0 |
1 |
2 |
3 |
4 |

Cash Flows |
-$1,000 |
$400 |
$300 |
? |
$200 |

It takes 2.5 years to recover the initial cash outlays. The firm’s cost of capital is 15%. What is the project’s NPV?

____

A) $83.5

B) $92.6

C) $105.5

D) $120.0

Answer #1

Proper solution is provided.

Telesis Corp is considering a project that has the
following cash flows:
Year
Cash Flow
0
-$1,000
1
400
2
300
3
500
4
400
The company’s weighted average cost of capital (WACC) is
10%. What are the project’s payback period (Payback), internal rate
of return (IRR), net present value (NPV), and profitability index
(PI)?
A.
Payback = 3.5, IRR = 10.22%, NPV = $1260, PI=1.26
B.
Payback = 2.6, IRR = 21.22%, NPV = $349, PI=1.35
C.
Payback =...

ABC Corporation is considering a project that provides the
following cash flows steam:
Year
0
1
2
3
4
5
Cash flows
-$1,000
$375
$425
$250
$110
$100
If WACC is 10%, what is NPV, and
should the company accept the project?
Find IRR, MIRR,
payback, and discounted payback
period.

ABC is considering a project that has following cash flow. The
cost of capital is 10%. What is the project’s profitability index?
Should ABC accept the project? Explain.
Year. Cash flows
0. ($1,000)
1. 250
2. 350
3. 250
4. 350

A company is considering a project that has the following cash
flows: -1200 in year 0, 400 in year 1, 425 in year 2, 450 in year
3, and 475 in year 4. The WACC is 14%. What is the project’s
NPV?
A $45.84
B $41.25
C $50.93
D $56.59
E $62.88

ABC Corporation is considering a project that provides the
following cash flows steam:
Year
0
1
2
3
4
5
Cash flows
-$1,000
$375
$425
$250
$110
$100
If WACC is 10%, what is NPV and should the company accept the
project?
Find IRR, MIRR, payback, and discounted payback period.
Considering the following projects.
Project
Year
0
1
2
3
4
A
Cash flows
-$100
$35
$35
$35
$35
B
Cash flows
-$100
$60
$50
$40
$30
Project A has...

Mansi Inc. is considering a project that has the following cash
flow data. What is the project's payback?
Year 0 1 2 3
Cash
flows -$750 $300 $325 $200
Hint: Payback period: The number of years required to recover a
project’s cost. Cumulative cash flow computation ignores the time
value of money by using actual cash flows.
Group of answer choices
2.50 years
2.36 years
2.63 years
2.42 years
2.83 years

2. A project has the following cash flows
C0
C1
C2
C3
($1000)
$300
$400
$600
What is the project’s payback period?
Year
0
1
2
3
Cash Flow
($1000)
$300
$400
$600
Cumulative
($1000)
($700)
($300)
300
a. Calculate the projects NPV at 10%.
b. Calculate the project’s PI at 10%.
c. Calculate an IRR for the project in question 2
How would you answer a,b, and c in excel? I am getting...

Company ABC is considering a project with the following
projected cash flows (in thousands):
Year 0: -$60
Year 1: 10
Year 2: 20
Year 3: 30
Year 4: 40
Year 5: -$25
a. Assuming a 10% hurdle rate, the NPV for the project is
b. Assuming a 10% hurdle rate, the IRR for company ABC project
is:
c. Based on the NPV calculation (10% hurdle rate) , should
company ABC undertake the project
d. Based on the IRR calculation (10%...

Braun Industries is considering an investment project which has
the following cash flows: Year Cash Flow 0 -$1,000 1 400 2 300 3
500 4 400 The company's WACC is 10 percent. What is the project's
payback, internal rate of return, and net present value? Select
one: a. Payback = 2.6, IRR = 21.22%, NPV = $300. b. Payback = 2.6,
IRR = 21.22%, NPV = $260. c. Payback = 2.4, IRR = 10.00%, NPV =
$600. d. Payback =...

Shannon Industries is considering a project which has the
following cash flows:
Year Cash Flow
0 ?
1 $2,000
2 $3,000
3 $3,000
4 $1,500
The project has a payback period of 2 years. The
firm’s cost of capital is 12 percent. What is
the project’s net present value? (round your answer
to the nearest $1.)
a. $ 570
b. $ 730
c. $2,266
d. $2,761
e. $3,766

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