Homework Answers
Using excel formula to calculate IRR and NPV
| A | B | C | ||
| Year | Project A | Project B | Project C | |
| 1 | 0 | -60000 | -105000 | -420000 |
| 2 | 1 | 13000 | 29000 | 210000 |
| 3 | 2 | 16000 | 29000 | 210000 |
| 4 | 3 | 19000 | 29000 | 210000 |
| 5 | 4 | 28000 | 29000 | |
| 6 | 5 | 33000 | 29000 | |
| IRR | 19.81% | 11.82% | 23.38% | |
| Using excel formula | IRR(A1:A6) | IRR(B1:B6) | IRR(C1:C6) | |
| NPV | $1,289.26 | ($16,328.59) | $29,382.52 | |
| Using excel formula | NPV(19%,A2:A6)+A1 | NPV(19%,B2:B6)+B1 | NPV(19%,C2:C6)+C1 |
a) and c) answers are provided in excel sheet
b) Project A and Project C should be selected because IRR is
greater than 19%
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(Related to Checkpoint 11.1 and Checkpoint 11,4) (IRR and NPV calculation) The cash flows for three...
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(Related to Checkpoint 11.1 and Checkpoint 11,4) (IRR and NPV calculation) The cash flows for three independent projects are found below: a. Calculate the IRR for each of the projects. b. If the discount rate for all three projects is 11 percent, which project or projects would you want to undertake? c. What is the nel present value of each of the projects where the appropriate discount rate is 11 percent? a. The IRR of Project Ais %. (Round to...
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Calculating IRR and NPV
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(Related to Checkpoint 11.1 and Checkpoint 11.4) (Calculating NPV, PI, and IRR) Fijisawa, Inc. is considering...
(Related to Checkpoint 11.1 and Checkpoint 11.4) (Calculating
NPV, PI, and IRR) Fijisawa, Inc. is considering a major expansion
of its product line and has estimated the following cash flows
associated with such an expansion. The initial outlay would be
$10,800,000, and the project would generate cash flows of
$1,250,000 per year for 20 years. The appropriate discount rate is
9.0 percent.
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b. Calculate the PI.
c. Calculate the IRR.
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Related to Checkpoint 11.1 and Checkpoint 11.4)(Calculating NPV, PI, and IRR) Fijisawa, Inc. is considering a...
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(Related to Checkpoint 11.1 and Checkpoint 11,4) (IRR and NPV calculation) The cash flows for three independent projects are found below: a. Calculate the IRR for each of the projects. b. If the discount rate for all three projects is 11 percent, which project or projects would you want to undertake? c. What is the nel present value of each of the projects where the appropriate discount rate is 11 percent? a. The IRR of Project Ais %. (Round to...
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P11-12 (similar to) Data Table Related to Checkpoint 11.1 and Checkpoint 11.4 RR and NPV calculation The cash flows for three inde a. Calculate the IRR for each of the projects b. If the discount rate for all three projects is 19 percent, which projector projects would you want to undertako? c. What is the not present value of each of the projects where the appropriate discount rate is 19 p ont? Project $120.000 Project $455.000 $13.000 Project S1400.000 Year...
Related to Checkpoint 11.1 and Checkpoint 11.4) (NPV and IRR calculation) East Coast Television is considering a project with an initial outlay of SX (you will ave to determine this amount). It is ex ppropriate discount rate for this project is 11 percent. If the project has an internal rate of return of 13 percent, what is the project's net present value? that the project will produce a positive cash flow of $48,000 a year at the end of each...
(Related to Checkpoint 11.1 and Checkpoint 11.4) (Calculating
NPV, PI, and IRR) Fijisawa, Inc. is considering a major expansion
of its product line and has estimated the following cash flows
associated with such an expansion. The initial outlay would be
$10,800,000, and the project would generate cash flows of
$1,250,000 per year for 20 years. The appropriate discount rate is
9.0 percent.
a. Calculate the NPV.
b. Calculate the PI.
c. Calculate the IRR.
d. Should this project be accepted?...
Related to Checkpoint 11.1 and Checkpoint 11.4)(Calculating NPV, PI, and IRR) Fijisawa, Inc. is considering a major expansion of its product line and has estimated the following cash flows associated with such an expansion. The initial outlay would be $10,600,000, and the project would generate cash flows of 51.240,000 per year for 20 years. The appropriate discount rate is 8.6 percent. a. Calculate the NPV. b. Calculate the PL c. Calculate the IRR d. Should this project be accepted? Why...
1-8 (similar to) Queaion Hau Related to Checkpoint 11.1 and Checkpoint 11.4) (NPV and IRR calculation) East Coast Tekrision is ooreidering a project with an intil outay of 5X tyou wil have to detemine ths arsourd it is aspacad hat the project wil produce a positive cash flow of $43,000 a year at the end of each year tor the next 16 years. The appropriate discount rate for this projact is 11 parcant If the project has an interal rade...
NPV versus IRR Piercy, LLC, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$77,500 -$77,500 43,000 21,500 29,000 28,000 23,000 34,000 21,000 41,000 a. What is the IRR for each of these projects? If you apply the IRR decision rule, which project should the company accept? Is this decision necessarily correct? b. If the required return is 11 percent, what is the NPV for each of these projects? Which project will you choose...
(Related to Checkpoint 12.1) (Comprehensive problem-calculating project cash flows, NPV, PI, and IRR) Traid Winds Corporation, a firm in the 31 percent marginal tax bracket with a required rate of return or discount rate of 12 percent, is considering a new project. This project involves the introduction of a new product. The project is expected to last 5 years and then, because this is somewhat of a fad product, it will be terminated. Given the following information, , determine the...
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