Question

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

Accept the project based on its NPV

Answer #1

Answer 1.

Let IRR be i%

NPV = -$3,430 + $974/(1+i) + $1,281/(1+i)^2 +
$1,996/(1+i)^3

0 = -$3,430 + $974/(1+i) + $1,281/(1+i)^2 + $1,996/(1+i)^3

Using financial calculator, i = 10.20%

Internal Rate of Return = 10.20%

Answer 2.

Required Return = 8.50%

NPV = -$3,430 + $974/1.0850 + $1,281/1.0850^2 +
$1,996/1.0850^3

NPV = $118.53

Answer 3.

IRR is higher than required return; therefore, accept this
project based on its IRR.

NPV is positive; therefore, accept this project based on its
NPV.

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 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

You've estimated the following cash flows (in $) for a
project:
A
B
1
Year
Cash flow
2
0
-5,400
3
1
1,325
4
2
2,148
5
3
2,258
Attempt 3/10 for 6 pts.
Part 1
What is the IRR for the project?

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 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?

Intro
You've estimated the following cash flows (in $) for two
mutually exclusive projects:
Year
Project A
Project B
0
-5,500
-8,250
1
1,325
1,325
2
2,148
2,148
3
4,010
7,918
The required return for both projects is 8%.
Attempt 1/10 for 10 pts.
Part 1
What is the IRR for project A?
Submit
Attempt 1/10 for 10 pts.
Part 2
What is the IRR for project B?
Submit
Attempt 1/5 for 10 pts.
Part 3
Which project seems better...

Cutler Petroleum, Inc., is trying to evaluate a generation
project with the following cash flows:
Year Cash Flow
0 –$ 85,000,000
1 125,000,000
2 – 15,000,000
A. If the company requires a 10% return on its investment should
it accept this project? Why?
b.Compare the project IRR for this project. How many IRRs are
there? If you should apply the IRR division rule. Should you accept
the project or not.? What's going on here?

A project has the following cash
flows:
Year
Cash Flow
0
$64,700
1
–30,700
2
–48,600
Required:
(a)
What is the IRR for this
project?
(Click to
select)14.26%13.85%13.58%13.04%13.31%
(b)
What is the NPV of this project,
if the required return is 8.5 percent?
(Click to
select)$-4,878.46$-5,122.38$4,878.46$-4,683.32$-4,976.03
(c)
NPV at 0 percent?
(Click to
select)$14,600.00$-14,600.00$-14,016.00$-14,892.00$-15,330.00
(d)
NPV at 17 percent?
(Click to
select)$3,016.88$3,105.61$2,957.73$2,839.42$-2,957.73

Kong Petroleum, Inc. is trying to evaluate a generator project
with the following cash flows:
Year
Cash Flow
0
-28,000,000
1
53,000,000
2
-8,000,000
If the company requires a 10% return on its investments, should
it accept this project? Why?
Compute the IRR for this project. How many IRRs are there? If
you apply the IRR decision rule, should you accept the project or
not? What’s going on here?
*Please type the calculations and answers*

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