Question

A project has the following cash flows:

Project

Year Cash Flow

0 -$3,233

1 1,000

2 1,000

3 1,000

4 1,000

Its cost of capital is 10 percent. What is the project’s Net Present Value?

Answer #1

NPV is the profitability of the project. It is the difference between present value of cash inflow - capital outlay.

We discount each years cashflow to the discount factor

**Projects NPV is -63.13**

Shannon industries is considering a project that has the
following cash flows:
Year Project cash flow
0 $-6,240
1 $1,980
2 $3,750
3 ?
4 $1,000
The project has a payback of 2.85 years.
The firm's cost of capital is 10 percent. what is the project's
net present value (NPV)?
a) 874.87
b) -146.92
c) 436.96
d) 727.95
e) -207.02

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

Mega Dynamics is considering a project that has the following
cash flows:
Year
Project Cash Flow
0
?
1
$2,000
2
3,000
3
3,000
4
1,500
The project has an IRR of 17% . The firm's cost of capital is 11
percent. What is the project's net present value (NPV)?

A project has the following total (or net) cash flows.
__________________________________________
Year Total
(or net) cash flow
_________________________________________
1 $20,000
2 30,000
3 50,000
4 60,000
_________________________________________
The required rate of return on the project is 15 percent. The
initial investment (or initial cost or initial outlay) of the
project is $80,000.
a) Find the net present value (NPV) of the project.
b) Find the profitability index (PI) of the project.
c) Calculate the modified internal rate...

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

Sky Enterprises is considering an investment project
with the following cash flows:
Year Cash
Flow
0
-$100,000
1
30,000
2
40,000
3
60,000
4
90,000
The company has a 7% cost of capital. What is the project’s
discounted payback period?
A. 2.76 years
B. 1.86 years
C. 1.86 years
D. 1.67 years
E. more than 3 years

What is the net present value of a project with the following
cash flows if the discount rate is 10 percent?
Year
0
1
2
3
4
Cash Flow -$32,000
$9,000 $10,000
$15,200 $7,800
A. $1,085.25
B. $1,193.77
C. $3,498.28
D. $4,102.86
E. $4,513.15

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 =...

Aerospace Dynamics will invest $150,000 in a project that will
produce the following cash flows. The cost of capital is 10
percent. (Note that the fourth year’s cash flow is negative.)
Year
Cash Flow
1
$
45,000
2
57,000
3
65,000
4
(48,000
)
5
140,000
a. What is the net present value of the
project? (Negative amount should be indicated by a minus
sign. Do not round intermediate calculations and round your answer
to 2 decimal places.)
...

What is the equivalent annual annuity for a 4-yr project with
the following cash flows and a discount rate of 9%?
Year
Cash Flow
0
(175,000)
1
45,000
2
55,000
3
65,000
4
85,000
What is the payback period for a project with the following cash
flows:
Year
Cash Flow
0
(175,000)
1
45,000
2
55,000
3
65,000
4
85,000
What is the net present value for a project with the following
cash flows and a discount rate of 9%?...

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