Question

Jackie Chang’s is considering a project with an initial cost of $231,400. the project will not...

Jackie Chang’s is considering a project with an initial cost of $231,400. the project will not produce any cash flows for the first 2 years. starting in year 3, the project will produce cash flows of $144,000 a year for 3 years. this project is risky, so the firm has assigned it a discount rate of 16.5%. what’s the projects net present value?


a. $2,335.56
b. $122,585.57

Homework Answers

Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Corner Restaurant is considering a project with an initial cost of $211,600. The project will not...
Corner Restaurant is considering a project with an initial cost of $211,600. The project will not produce any cash flows for the first three years. Starting in Year 4, the project will produce cash inflows of $151,000 a year for five years. This project is risky, so the firm has assigned it a discount rate of 18.6 percent. What is the project's net present value? A) -$46,028.92 B) $39,487.15 C) -$38,399.55 D) $67,653.02 E) $18,715.97
Corner Restaurant is considering a project with an initial cost of $211,600. The project will not...
Corner Restaurant is considering a project with an initial cost of $211,600. The project will not produce any cash flows for the first five years. Starting in Year 4, the project will produce cash inflows of $151,000 a year for three years. This project is risky, so the firm has assigned it a discount rate of 18.6 percent. What is the project's net present value? A) -$46,028.92 B) $39,487.15 C) -$38,399.55 D) $67,653.02 E) $18,715.97
The Blueberry Company is considering a project which will cost $401 initially. The project will not...
The Blueberry Company is considering a project which will cost $401 initially. The project will not produce any cash flows for the first 3 years. Starting in year 4, the project will produce cash inflows of $598 a year for 4 years. This project is risky, so the firm has assigned it a discount rate of 20.3 percent. What is the net present value?
The Blueberry Company is considering a project which will cost $304 initially. The project will not...
The Blueberry Company is considering a project which will cost $304 initially. The project will not produce any cash flows for the first 3 years. Starting in year 4, the project will produce cash inflows of $436 a year for 6 years. This project is risky, so the firm has assigned it a discount rate of 21.4 percent. What is the net present value?
A firm is considering two capital investment projects. Project A involves an initial cost of $15,000....
A firm is considering two capital investment projects. Project A involves an initial cost of $15,000. The discounted present value of all future cash flows is $18,000. Project B requires an initial expenditure of $25,000. The discounted present value of all future cash flows is $29,000. (i) Calculate the net present value of each of the two projects. Which would be preferred according to the net present value criterion? (ii) Calculate the profitability index of each of the two projects....
Alpha Industries is considering a project with an initial cost of $9.7 million. The project will...
Alpha Industries is considering a project with an initial cost of $9.7 million. The project will produce cash inflows of $1.67 million per year for 9 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 6.12 percent and a cost of equity of 11.61 percent. The debt–equity ratio is .77 and the tax rate is 40 percent. What is the net present value of the project?
Alpha Industries is considering a project with an initial cost of $9.1 million. The project will...
Alpha Industries is considering a project with an initial cost of $9.1 million. The project will produce cash inflows of $2.13 million per year for 6 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 6.15 percent and a cost of equity of 11.63 percent. The debt–equity ratio is .78 and the tax rate is 35 percent. What is the net present value of the project?
Alpha Industries is considering a project with an initial cost of $8.4 million. The project will...
Alpha Industries is considering a project with an initial cost of $8.4 million. The project will produce cash inflows of $1.64 million per year for 8 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 5.73 percent and a cost of equity of 11.35 percent. The debt–equity ratio is .64 and the tax rate is 39 percent. What is the net present value of the project?
You are considering a project that has an initial cost of $1,200,000. If you take the...
You are considering a project that has an initial cost of $1,200,000. If you take the project, it will produce net cash flows of $350,000 per year for the next six years. If the appropriate discount rate for the project is 11 per cent, what is the profitability index of the project? Select one: A. 0.09 B. 1.09 C. 1.24 D. 2.18
Hendrix Guitars is considering the following project. The Project cash flows are below: Initial Cost is...
Hendrix Guitars is considering the following project. The Project cash flows are below: Initial Cost is $ 2.1 million; annual net cash flows are $750,000 per year for 5 years. what is the Profitablity Index If the appropriate discount rate is 7.5%?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT