Question

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

Answer #1

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

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)?

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 =...

Sorenson Motors (SM) is considering a project that has the
following cash flows:
Year Cash Flow
0 Initial Outlay
1 $2,000
2 3,000
3 3,000
4 1,500
The project has a payback period of 2.5 years. The weighted average
cost of capital is 12%. Which of the following statements is NOT
correct?
a. Acceptance of this project would increase SM’s value by
$7,265.91.
b. The project is expected to generate $1.12 for each $1.00 of
investment.
c. If SM were...

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 =...

You are considering a project
with the following set of cash flows:
Cash
flow
0
-5,500
1
2,000
2
3,000
3
1,000
4
2,000
a. What is
the payback period of this project? If the
pre-specified cut off is 3 years,
should this project be accepted?
b. What is
the discounted
payback period of this
project? If the
pre-specified cut off is 3 years, should this project be
accepted? The discount rate is
10%.

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

shannon co. is considering a project that has the following cash
flow and cost of capital (r) data. What is the project discount
paycheck?
R+ 12.00%
Year 0 1 2 3
CF -$1000 $450 $425 $400 $410 $400

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?

Assume the following cash flows for Project A: Year 0
=$(10,000); Year 1 = $4,000; Year 2 = $3,500; Year 3 = $1,500; Year
4 = $3,000; and Year 5 = $1,500. The company’s hurdle rate is
9.00%. For Project A, please calculate: 1) the discounted payback
period; 2) the net present value; 3) the internal rate of return;
and 4) the modified internal rate of return.

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