Question

DeBarry Corporation makes an investment of $50,000 that yields the following cash flows:

Year Cash Flow

1. $10,000

2 10,000

3. 16,000

4. 18,000

5 20,000

a. What is the present value with a 9 percent discount rate (cost of capital)? (Use a Financial calculator to arrive at the answers. Round the final answer to the nearest whole dollar.)

Net present value $ ?

b. What is the IRR? (Round the final answer to 2 decimal places.)

IRR % ?

c. Would you make the same decision under both parts a and b?

Yes or No

Answer #1

DeBarry Corporation makes an investment of $50,000 that yields
the following cash flows:
Year Cash Flow
1 $10,000
2 10,000
3 16,000
4 18,000
5 20,000
a. What is the present value with a 9 percent discount rate
(cost of capital)? (Use a Financial calculator to arrive at the
answers. Round the final answer to the nearest whole dollar.)
Net present value $
b. What is the IRR? (Round the final answer to 2 decimal
places.)
IRR %
c. Would...

11. The Ogden Corporation makes an Investment of $25,000, which
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percent discount rate (cost of capita) b. What is the internal rate
of return (IRR)? c. In this problem would you make the same
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The Hudson Corporation makes an investment of $28,050 that
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Use Appendix B and Appendix D for an approximate answer but
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Year
Cash Flow
1
$15,000
2
15,000
3
3,000
a. What is the net present value at a discount
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and round your answer to 2 decimal places.)
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Rooster Co. has identified an investment project with the
following cash flows. Year Cash Flow 1 $ 970 2 760 3 1,430 4 1,790
Requirement 1: If the discount rate is 9 percent, what is the
present value of these cash flows? (Enter rounded answer as
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calculations. Round your answer to 2 decimal places (e.g., 32.16).)
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Aerospace Dynamics will invest $100,000 in a project that will
produce the following cash flows. The cost of capital is 15
percent. (Note that the fourth year’s cash flow is negative.) Use
Appendix B for an approximate answer but calculate your final
answer using the formula and financial calculator methods.
Year
Cash Flow
1
$
50,000
2
36,000
3
30,000
4
(27,000
)
5
60,000
a. What is the net present value of the
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McCann Co. has identified an investment project with the
following cash flows. Year & Cash Flow YR 1 - $800 YR 2 -
$1,090 YR 3 - $1,340 YR 4 - $1,180
a. If the discount rate is 11 percent, what is the present value
of these cash flows?
b. What is the present value at 19 percent?
c. What is the present value at 28 percent?

Fuente, Inc., has identified an investment project with the
following cash flows.
Year
Cash Flow
1
$1070
2
$1300
3
$1520
4
$2260
a.
If the discount rate is 8 percent, what is the future value of
these cash flows in Year 4? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g.,
32.16.)
b.
If the discount rate is 11 percent, what is the future value of
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Fuente, Inc., has identified an investment project with the
following cash flows.
Year
Cash Flow
1
$
1,090
2
1,320
3
1,540
4
2,280
a.
If the discount rate is 7 percent, what is the future value of
these cash flows in Year 4?(Do not round intermediate
calculations and round your answer to 2 decimal places, e.g.,
32.16.)
b.
If the discount rate is 13 percent, what is the future value of
these cash flows in Year 4? (Do not...

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following cash flows. Year Cash Flow 1 $900 2 1,090 3 1,250 4 1,140
a. If the discount rate is 11 percent, what is the present value of
these cash flows? b. What is the present value at 17 percent? c.
What is the present value at 28 percent?

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